General Growth Properties is the ungainly and ironic name of the owner of some of the most successful malls in the country. The name is all the more ironic now that the company is in bankruptcy.
What does a bankrupt mall look like? It’s not likely you’ll see anything different. The mall would love to cut costs but can’t afford to show the slightest hint of decay or neglect because of the risk of making shoppers feel unwelcome or giving stores second thoughts about paying the rent. So far, there are no plans to close any of General Growth Properties’ malls, but other malls are closing or emptying out, putting pressure on healthy malls to look extra-healthy.
As the year started, there were predictions that 100 malls or more could close this year, and the way the CEO of General Growth Properties tells the story, banks are worried enough not to lend to anyone who is running a mall.
The root of the problem is declining income for consumers, who in turn are spending about 5 percent less than retailers had planned on. The lower revenue for retailers leads to stores closing, and with fewer stores, malls collect less in rent. Even before consumer spending turned down, there were malls that were half empty, their corridors “echo chambers” (as one writer put it) connecting the anchor stores to the food court. As retailers decide which stores to close, the locations in malls that look like they’re falling apart will be near the top of the list. It’s in order to avoid that downward spiral that your local bankrupt mall will be going out of its way to give the appearance of success.