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Changing retail landscape

Unfortunate retail climate presents opportunities:

  • Triple Five Group continues to be months behind on its mortgage payments for the Mall of America and has entered a cash-management agreement to avoid foreclosure. The company started having trouble meeting the mortgage after the mall had to close in March due to state-mandated efforts to curb the spread of coronavirus. Mall of America’s collateral value, which was $2.3 billion in 2014, has decreased to $1.9 billion, according to Trepp. Tenant rent collections have climbed from 33% in April and May to 50% in July. Triple Five pledged a 49% stake in the Mall of America for its American Dream megamall in East Rutherford, N.J., which hasn’t been able to fully open. (StarTribune)
  • Target said it expects to open 27 new stores between now and the end of the year. The big-box retailer’s net income soared to $1.69 billion April through June, an 80 percent jump year-over-year. Same-store sales rose by 11 percent and its digital sales were nearly three times what it reported last year. Digitally originated sales made up 17.2 percent of all sales for the quarter, up from 7.3 percent at the same time last year. (TRD)
  • Authentic Brands and Simon Property Group have formed a joint-venture called Sparc. The JV is paying $140.1 million for Lucky Brand, salvaging its stores and website. And Sparc’s bid of $325 million to acquire Brooks Brothers from bankruptcy and save at least 125 stores was just approved and is expected to close later this month. Chairman Jamie Salter told CNBC, “We have over $1 billion in dry powder … and I didn’t leverage the company up.“ He recently secured a fresh capital infusion of $600 million from backers BlackRock, General Atlantic, and Leonard Green & Partners for more deals. (CNBC)

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