9/13/2023 0 Comments David simon malls![]() ![]() The reason I say “real estate concepts” is because SPG must preserve as much income as possible from the tenants in his challenged malls, particularly the anchors such as JCP. In my opinion, the “Authentic” part of ABG should be replaced by “Old.” And the RC part of SPARC (Retail Concepts) should be replaced by Real Estate Concepts. This clever move brought ABG’s brands under the SPARC umbrella including Nautica, Lucky Brand, Brooks Brothers and Eddie Bauer, just to name a few. Simon dug even deeper into retail by forming a partnership with (ABG) Authentic Brands Group, naming it Simon Properties Authentic Brands Retail Concepts (SPARC). Retail is not a certain paradise: Brookfield divested Forever 21 in 2021. How did he get there? He took all three out of bankruptcy. He has already waded into owning retail with Brookfield Asset Management by acquiring JC Penney, fast-fashion retailer Forever 21 in 2020, and teen retailer Aeropostale in 2016. Lo and behold, and not surprisingly, another billionaire real estate mogul is David Simon, CEO of Simon Property Group. Acquire a bunch of once-cool brands on the cheap, license third parties to run them, then license them out to a mall developer who then shovels them into hundreds of dying JC Penney stores that happen to be in dying malls. ![]() In fact, there was a telling moment during an interview at a WWD CEO Summit a couple years ago when he said, and I’m paraphrasing here, “The retail business is really hard, real estate is a lot easier.” Well, duh, of course it is. Thus, he is programmed to view all of his properties occupied by buildings that happen to be retail stores (and websites) as well…real estate. Baker’s brain is hardwired in real estate. And therefore, in my opinion, they will only have negative results on the retail businesses. While many of his initiatives are still playing out, they are all moves that are ultimately based on unlocking, yes, real estate value. While the jury may still be out on whether his leadership over HBC’s retail entities has, or is, yielding positive results, the jury (in my head) has decided on the verdict. They were, and still are, the result of his brilliant ability to unlock the value of retail real estate under the guise that his primary purpose is to re-energize and grow his retail businesses. Why? Because however many billions of dollars Baker has amassed during his career, they were not the result of his retail acumen. ![]() My advice was that Kohl’s must do whatever they can to repel such a deal. I have already expressed my opinion of HBC’s intent to acquire Kohl’s, under the leadership of the now high-profile Richard Baker. Let’s take a look at the situation Kohl’s is up against, and it isn’t pretty. ![]()
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