Will mall owner’s $5 billion revitalize retailers weakened by COVID-19?
It’s not exactly a Marshall Plan for retail businesses hurt by COVID-19, but Brookfield Asset Management has announced the launch of a program to provide retailers with funds they need to recapitalize their businesses.
The $5 billion Retail Revitalization Program, funded by the mall owner and institutional partners, will seek out non-controlling investments in retail businesses. It will focus on companies that have been in business for at least two years and that were generating $250 million or more in sales prior to the novel coronavirus outbreak.
Brookfield’s effort will be led by Ron Bloom, managing partner and vice chairman of the company’s private equity group. Mr. Bloom is described by Brookfield as “a principal architect of the restructuring and rejuvenation of the automobile industry on behalf of the U.S. government during the 2008 financial crisis.”
Mr. Bloom said the new program will provide a hand for medium-sized companies looking to get “back on their feet,” adding, “We believe this is a critical component to getting the economy moving again, and we would like to partner with companies and entrepreneurs that can draw on our capital and expertise to stabilize and grow their business.”
This is not the first time that Brookfield has sought to help a retailer in need. The asset management company joined with Simon Property Group and the licensing firm Authentic Brands Group to acquire the bankrupt Forever 21 chain for $81 million back in February. In 2016, Simon and General Growth Properties (later acquired by Brookfield) were part of a $243 million bid to acquire Aeropostale and its 229 stores.
- Brookfield to Create $5 Billion Retail Revitalization Program – Brookfield Asset Management Inc.
- Is Forever 21 a wise investment for its new mall landlord owners? – RetailWire
DISCUSSION QUESTIONS: How effective do you think Brookfield’s $5 billion Retail Revitalization Program will prove to be in helping struggling retailers? Which retailers hurt by store closures as a result of stay-at-home orders would be good investments for Brookfield?