Retail

Related Co Chair: Many SMB Retail, Restaurants 'Don’t Have The Wherewithal To Reopen'

Stephen Ross, chairman of Related Cos., said bankruptcy could be the future for many retailers as the effects of the pandemic continue to play out.

Ross, speaking with CNBC on Tuesday (May 26), said retail and hotel industries were the hardest-hit by the pandemic, and the closures and reduced travel would force closures and bankruptcies beyond those like J.C. Penney, Neiman Marcus and J. Crew that have filed already.

“You are going to have such a flood of cases going to the bankruptcy court,” he said, according to CNBC. “And these aren’t really the type of bankruptcies that were induced by bad practices. It’s really all driven by the pandemic.”

Related owns numerous malls and shopping centers, along with residential and office space across the country. Its own properties include New York’s Hudson Yard Mall and Shops at Columbus Circle, both of which remain closed as the city continues to fight the coronavirus in one of the worst-hit areas in the country.

Related CEO Jeff Blau, also recently talking with CNBC, reported that 35 percent of its retail tenants had been able to make rent payments on time, and only 20 percent of enclosed mall locations had been able to do so. Rent payments have been a point of contention with big real estate owners as companies have had to try to make ends meet amid plummeting sales due to job losses and fear of the coronavirus.

Brick-and-mortar retailers had already been struggling before the pandemic as eCommerce moved in and took over, but the pandemic has expedited their downfall.

Texas-based Tuesday Morning announced on Tuesday (May 26) that it would be filing for bankruptcy. The retailer, which had no online presence and relied on foot traffic, could not survive the pandemic and had to furlough around 9,000 employees.

And as for J.C. Penney, the bankrupt department store retailer has been in talks with Amazon about some kind of a deal, as reported by Fox Business, which cited Women’s Wear Daily.

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NEW PYMNTS DATA: HOW WE SHOP – SEPTEMBER 2020 

The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.

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