BACK IN BUSINESS
JCPenney to reopen Hamilton Place store
Jared Boatfeld says he’s looking forward to the reopening of JCPenney’s Chattanooga store on Wednesday because he likes its big and tall clothing collection. “It’s a little bit frustrating,” he said about the slew of store closings and the slow ramp-up by some retailers amid the coronavirus. “I understand. You’ve got to do what’s right.”
The JC Penney store at Hamilton Place mall is turning the lights back on after a shutdown of more than two months, said Stacey Keating, senior director of public relations and corporate communications for CBL Properties, the shopping center’s operator.
The store will rejoin the mall’s other anchor tenants such as Belk, Dillard’s and Dick’s Sporting Goods in returning to business at the mall, which Keating pegged at about 80% reopened. Northgate Mall in Hixson, also owned by Chattanooga-based CBL, is at about 75%, she said.
Still closed at both malls are Bath and Body Works and Victoria’s Secret. A phone message for the Hamilton Place Victoria’s Secret said it would reopen Monday at 11:30 a.m. There was no such message at Northgate Mall.
Also at Hamilton Place, all but one of the food court’s restaurants have reopened, as has Barnes & Noble bookstore.
Rick Prem, who was working at the Gold Rush jewelry kiosk near one of the JCPenney entrances on Monday, said he’ll be glad to see the store come back, but he didn’t know for how long that would be for the troubled retail giant.
“Business is OK,” Prem said. “It could always be better.”
Since the JCPenney store’s closure in March, the national retailer has gone into Chapter 11 bankruptcy protection and is restructuring its operations.
The Texas-based company has said it will permanently close nearly 30% of its 846 stores as part of the reorganization plan. The retailer started reopening some of the stores across the country last week despite
the bankruptcy filing.
For CBL Properties, the stakes are high. Of CBL’s top 25 retailers in its nationwide portfolio of malls and centers, JCPenney has the most square feet of any one company at 5.69 million, according to CBL’s most recent filing with the Securities and Exchange Commission.
JCPenney has 47 stores in CBL’s sites, 29 of which are owned by the retailer, the filing said. J.C. Penney accounts for about 1% of CBL’s total revenues.
At a bankruptcy court hearing last Thursday, JCPenney said it has asked all its landlords to defer or reduce rent through August, according to The Dallas Morning News.
JCPenney plans to have 500 stores, or 60% of its 846 locations, open by Wednesday, and it hasn’t disclosed which stores it plans to close as part of its bankruptcy reorganization, the newspaper said.
Bradley Square Mall in Cleveland, Tennessee, also holds a JCPenney store. No one at the mall, the Cleveland store or with the company could be reached for comment on Monday.
CBL also faces pressure from plans to close stores by its top revenue producer at its malls, L Brands, which operates Victoria’s Secret, Bath & Body Works and White Barn.
The SEC filing showed that L Brands operates 127 stores in CBL centers, accounting for 4.3% of the Chattanooga company’s annual revenues.
L Brands announced last month that it plans to permanently close about 250 stores in the U.S. and Canada in 2020, and another 50 Bath & Body Works stores in the U.S. and one in Canada. It also hasn’t disclosed which stores will shutter.
Early this year, L Brands planned to sell 55% of Victoria’s Secret to New York private equity firm Sycamore Partners. But after the pandemic outbreak, the deal was called off.
CBL reported last month in its first quarter earnings release that it received just 27% of billed cash rents from retailers in its entire portfolio for April, and its May collection rate likely will be in the 25% to 30% range due to store closings during the coronavirus outbreak.
Stephen Lebovitz, the company’s chief executive, said CBL anticipates a significant portion of April and May rents will be collected later in 2020 and into 2021 under agreed upon deferral plans.
However, negotiations are ongoing, and it is premature to estimate a recovery rate, he said.
“While first quarter results were largely as anticipated, the COVID19 pandemic significantly shifted our expectations for the remainder of the year,” Lebovitz said.