Simon Property Group plans to reopen about 50% of its properties within the next week, according to the company’s earnings call. The mall developer already has opened 77 retail properties, in addition to 12 of its Designer and international Premium Outlets properties, in locations where local restrictions were eased.
“Business was off to a good start in January and February, with shopper traffic, tenant demand, reported retailer sales and other underlying portfolio fundamentals trending at or above our expectations,” said David Simon, President, CEO and Chairman of Simon Property Group in a statement. “In March, we quickly pivoted to address the rapid spread of COVID-19, temporarily closing U.S. properties, reducing operating costs and increasing financial resources. We are beginning to reopen properties and are encouraged by the consumer response thus far.”
The property management company’s net income for Q1 2020 was $437.6 million, down from $548.5 million in Q1 2019. Shopping center occupancy was at 94%, and reported retailer sales per square foot were $673 for the trailing 12 months ended March 31.
Simon has taken several steps to cut costs during its extended closures, including the suspension or elimination of more than $1 billion in new development projects, the furlough of some employees and the reduction of executive pay. The retailer plans to reevaluate all suspended projects in the future.
The reopened malls will follow standard coronavirus safety precautions, including limited hours, reduced total capacity, fewer chairs in the food courts and masks for shoppers who request them. Department stores including Dillard’s and Neiman Marcus are eager to get back to business even with these restrictions, according to Simon on the earnings call.
“I do think for the retailers that are opening, they are gaining market share,” said Simon on the call. “I think others that aren’t ready are missing the opportunity.”