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.