By Chris Isaac
As more regions of Pennsylvania begin loosening restrictions on businesses operating during the pandemic, shoppers and store employees alike are questioning what that will look like for shopping malls.
In his quarterly earnings call last month, Joseph Coradino, PREIT’s Chairman & CEO, shed light on what shoppers at the Plymouth Meeting and Willow Grove Mall will experience when Montgomery County goes green Friday.
PREIT is responsible for 21 malls in Pennsylvania and nearby states, including Springfield Mall in Delaware County and Exton Square Mall in Chester County, and at the time of the earnings call, four of the 21 malls had been reopened.
Naturally, concerns regarding safety measures are on everyone’s minds. Coradino addressed this, stating, “We’re offering mask[s] to each customer as they enter, have plentiful sanitizer stations throughout our properties, have increased our cleaning protocols, have welcome stations, are counting customers, developed social distancing protocols that allow for appropriate flow of customers, while creating a safer and better sanitized environment to assist our customers in getting back to shopping and back to work.”
These efforts seem sufficient to assuage the fears of customers, as Coradino shared that two of the malls that had already reopened (Magnolia mall in South Carolina, and Jacksonville mall in North Carolina) were each going to be at more than 70% capacity at the start of June.
A return to in-person shoppers could indeed be crucial for some stores, as Coradino concedes that smaller retailers are facing challenges to subsist off digital sales alone.
However, Coradino also believes that online shopping is going to become part of the new norm for malls. This is not surprising, as no one can say for certain when the dangers of COVID-19 will fully subside, and whether a second wave will become a reality or not. As such, customers with health concerns will likely view the option to utilize online orders as essential for their shopping needs.
Fortunately, Coradino acknowledges this, and mentioned contingency plans should the virus continue to be an issue. “In addition to curbside offerings, we’re exploring creative personal shopping avenues, inventory overstock solutions and virtual sidewalk sales among other ideas. We’ll not rest until we have the confidence that we have a platform that allows our tenants to continue operating, if something like this were to occur again and to assist in amplifying their platforms.”
Despite these measures, it is of course no surprise that the quarantine has hurt profits. Regardless of the hardships transpiring, this was still an earnings call, so Coradino touched on the financial impact of this situation as well. “The COVID-19 pandemic impacted the quarter and will impact our industry into the future in particular, the department store landscape. Department stores have long been challenged to regain their footing and we were among the first to recognize this and move to replace the underperformers. That said, this crisis has certainly accelerated the challenges and result[ed] in store closings.”
Meanwhile, Coradino also mentioned that PREIT has had to negotiate rent deferrals for many mall tenants, but he feels confident over 90% of the due rent will be paid by the end of 2021.
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