The Most Prominent US Mall Owner Is Taking The Risk To Buy Retailer Shops Even If The Industry Struggles.
Simon property group, regarded as the most prominent mall owner in the US, is in the mood of buying mall operators in America even if the industry struggles. The owner of the biggest mall is very close to reaching an $81 million deal. This week it announced its plan to acquire the mall owner of Taubman, estimated worth $3.6 billion.
In collaboration with Taubman, the Simon group of companies is going to double their earnings from buying the most profitable malls in the country. Simon is taking a significant risk of buying malls. As per report till Dec 31, Simon groups had already over $7.1 billion.
Simon, CEO says that We have zigged when others have zagged American mall owner is very affected after the coming up of online shopping platforms. The retail stores are closing down day by day and the level of selling stores increases. It gives a chance to real estate owners to fill the moved on spaces.
The Shares Show A Significant Fall Down:-
- Macerich shares are down by 48% according to last year.
- CBL’s stock has tanked 68%.
- Washington Prime Group shares are down by 50%
- Simon shares were down by 24% last year.
It gave them a big chance for a market cap of $44.8 billion. This group includes Forever 21 deal and Simon groups. Brands Group has made around $81 million from stalking-horse bid, and Forever 21 is before it.
Last Sunday, Forever 21 said that it has to cancel all the action plans, and they will be very close to Simon very soon. Simon would allow them to keep Forever 21 stores open. The sales of the retailer are slumping because of the growth of business in overseas. They have to face fierce competition from brands like H&M, Zara, and Uniqlo. But Simon groups and Forever 21 stores can solve their problem.
Simon groups are buying retailers from 2016; it purchased about $243 million to save them. Simon told analysts that they invested about $25 million in Aeropostale and got about $13 million back. They have faces losses from $80 million to $100 million from the last three years.
Last month Simon CEO said that Aero and Forever 21 give confidently for growing of the Simon group. The collaboration is a good deal with Forever 21. It is a brand of $2 billion in global sales. Similarly, Aero also presents an excellent re-positioning activity.
More malls for Simon
Taubman owns properties in New Jersey of about $3.6 billion. The economic sense for Simon to buy retails and real state services will bring some profit to the group in the future. The proposal for buying Forever 21 is a good step from Simon’s groups.
Taubman said that in mall sectors, Simon has the best balance sheet. In return, the Simon groups are happy to pay $52 for each share. Near about 51% of the premium share of Taubman closed on Feb 7. The last trading deal takes place on Feb 10.