CBS Detroit - The fallout of COVID-19 has claimed yet more bankruptcies. In an article by the Detroit News, two companies who operate malls in Michigan, CBL, and Pennsylvania Real Estate Investment Trust (PREIT) have filed for bankruptcy.
Before Coronavirus, many retailers and key anchor stores like Sears and JCPenney were having trouble treading water financially with the shift towards online. The Coronavirus Pandemic has sealed the fate for a lot of companies who have filed for bankruptcy, gone out of business, or closed stores. Which has had a dramatic impact on mall operators all-across the U.S. who lost millions during the COVID-19 shutdown. Especially in states like Michigan with only essential stores open for many months.
MORE FROM CBS DETROIT: Wayne County Judge Halts Sale Of Former State Fairgrounds To Amazon For 14 Days
CBL owns and operates 107 malls including Laurel Park Place Mall in Livonia and Meridian Mall in Okemos. While CBL and PREIT have said they plan on keeping their malls open while in bankruptcy proceedings. According to the Detroit News, these two bankruptcy filings hit just 25 days before Black Friday. The annual kickoff to the holiday shopping season. At the same time stores will have to limit crowds on what is their busiest and the one-time where they make their most profits for the fiscal year. Online stores like Amazon, Target, and Walmart are projected to fare easier as they were open during the pandemic and have had infrastructure in place to support online sales for some time now. With the current Pandemic-affected holiday season coming up, shoppers may forgo the lines and opt for FedEx to deliver their gifts. According to CBL more than 30 of its tenants have filed for bankruptcy, which includes Ascena which owns 100 Ann Taylor, LOFT, and other retail stores in CBL malls.
MORE FROM CBS DETROIT: Detroit Woman Sues Peeing Pastor For $2 Million While On A Flight Home From Las Vegas
PREIT is a mall operator out of Philadelphia. They have more than 20 malls which include Woodland Mall in Grand Rapids. They have added restaurants, movie theaters, and gyms which The Detroit News says accounts for 24% of business. These types of businesses keep foot traffic in their properties while brick and mortar retail is facing a decline. However, gyms, restaurants, and movie theaters have faced more restrictions in capacity with COVID-19. Laurel Park Place Mall owned by CBL also features a Phoenix Theater, Bar Louie, Grand Tavern, among other restaurant offerings.
According to PREIT, while many stores are paying rent now, it still expects revenues to be down from the effects of COVID-19.
MORE FROM CBS DETROIT: Here's Governor Whitmer's Up-To-Date Response On COVID-19
© 2020 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. Information from The Detroit News contributed to this report.
for more features.