A risky bet by America’s mall owners: Plucking retailers out of bankruptcy to salvage a pandemic-hit industry

From the article:

In many instances, as it plays out, these bankrupt retailers are major tenants in malls, with sprawling store counts. Meanwhile, some of the biggest retail real estate owners in the country, like Simon Property Group, are sitting on cash. A lot of it. On June 29, in an investor update, Simon said it had roughly $8.5 billion of liquidity on its balance sheet, including about $3.5 billion of cash on hand. It issued another $2 billion in senior secured notes on July 7.

In one of its latest deals, Simon, which is the biggest U.S. mall owner by the number of malls it operates, has teamed up with the apparel-licensing firm Authentic Brands Group to supply financing to carry Brooks Brothers through bankruptcy.

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Meantime, ABG and Simon have put up a stalking-horse bid of $191 million for the bankrupt denim maker Lucky Brand’s assets. The duo has until July 27 to come up with funding, according to a court document.

And a trio of ABG, Simon and the mall owner Brookfield Properties have also explored acquiring department store chain Penney out of bankruptcy, CNBC previously reported. The three came together before to save the apparel chain Forever 21, which went bankrupt in September 2019, for $81 million.