David Simon
David Simon
Chairman and CEO at Simon Property Group
Last year's rank: 33
Retail might be a disaster after the coronavirus pandemic, with two months of historically low sales figures and plenty of brands filing for bankruptcy, but experts think Simon Property Group could be poised to survive.
The David Simon-helmed company has about $8.5 billion of liquidity and is sitting on about $3.5 billion of cash on hand as of last month, all while it sold $2 billion of senior notes in early July.
With all that cash, the Indianapolis-based real estate investment trust has been making plays to help struggling retailers. It partnered with Authentic Brands Group (ABG) to give Brooks Brothers an $80 million loan to survive bankruptcy, put up a stalking-horse bid of $191 million for Lucky Brand’s assets with ABG, and is considering joining ABG and Brookfield properties to acquire bankrupt department store chain JCPenney, CNBC reported.
It wouldn’t be the first time the trio joined forces to save a struggling retailer, given that they bought Forever 21 for $81 million in February. That tactic worked in Simon’s favor before when Brookfield and Simon bought Aéropostale in 2016, which later became profitable, the Wall Street Journal reported.
Simon also partnered with logistic platform Fillogic to lease “micro-distribution hubs” at retail properties in Simon’s portfolio, which could be a good move as more shoppers flock to online retailers.
Before the pandemic, Simon owned seven of the top-10 most valuable malls in the country, according to CNBC.
Naturally, it hasn’t been all rosy for Simon during the pandemic. It furloughed about 30 percent of its nearly 4,500 employees in March and has had to take retailers to court for rent payments. Last month, Simon sued Gap over about $66 million in missed rent and Brooks Brothers for $8.7 million.
It made waves in February when it agreed to buy an 80 percent interest in mall owner Taubman Realty Group for $3.6 million, which experts previously told CO was timed to perfection. However, Simon backed out of the deal in June, citing the pandemic as the reason, and is facing a lawsuit from Taubman over the cancellation.
But if any mall owner can shape America’s post-coronavirus recovery it’s David Simon. He was tapped in April — along with 200 others — to serve on the corporate panel to advise President Donald Trump’s administration in getting the U.S. out of the economic hole caused by the pandemic.—N.R.
