Simon CEO says Americans are experiencing ‘euphoria’ as they return to malls
Simon Property Group CEO David Simon offered answers to analysts yesterday that were one part optimistic and another cautious on the prospects for the company’s malls this year.
Mr. Simon, speaking on his company’s first quarter earnings call, described a shopping atmosphere in which consumers are experiencing “some level of euphoria” as they return to malls to shop.
He did not fully jump on the optimist bandwagon, however, pointing out that consumers are returning in significant numbers in some locations but not in others. He specifically called out activity at Simon properties in California and New York that he is hoping to see pick up as the pandemic comes under further control and as international tourists return to the U.S. to shop.
Mr. Simon contrasted Florida to California, where the economy opened later. DisneyLand in California has only recently reopened and the state, as a whole, has about a “nine month lag” to make up. Simon’s properties, including enclosed and open air facilities, he said, are a “real presence” for the company in California that he expects will begin to deliver “benefits” as the year progresses.
New lease activity at Simon’s properties have begun to rebound, according to Mr. Simon. He pointed to a very high level of demand by restaurants looking to come into the company’s malls and fill space vacated by other operators who left as a result of the pandemic. “They want to come in, retrofit it [and] get open quicker,” he said.
Mr. Simon said that the company’s malls were also seeing significant interest from strong retailers looking to expand their store presence. He cited multiple deals in the works with American Eagle Outfitters and Urban Outfitters as causes for hopefulness. “I’d say we generally feel pretty good and much better than we felt, you know, in a long time,” he said.
Simon is also seeing brands looking to sign new leases as consumer-direct sales become more important to their performance. He spoke of Crocs, which had “lost its mojo,” now coming back strong and looking to open shops. Apparel and footwear are categories that are heating up and brands in those spaces are looking for room to grow at Simon’s malls, he said.
Simon’s occupancy rate stood at 90.8 percent at the end of March with rent per square foot rising 0.6 percent over last year, according to the company’s earnings release.
- Simon Property Group Reports First Quarter 2021 Results And Raises Full Year 2021 Guidance – Simon Property Group
- Simon Property Group, Inc.’s (SPG) CEO David Simon on Q1 2021 Results – Earnings Call Transcript – Seeking Alpha
- Is suburban retail (malls, too) primed for a comeback? – RetailWire
DISCUSSION QUESTIONS: Are Americans itching to get back to consumer activities such as shopping in malls, eating at restaurants, seeing movies, etc.? If yes, will these be one-off experiences or a return to pre-pandemic normality?