Some of the top tenants in CBL & Associates Properties Inc.'s shopping centers are among the most actively shedding stores amid the coronavirus-driven retail meltdown, documents show.
As Chattanooga-based CBL faces another deadline on Wednesday in its debt talks with lenders, the company finds many of its key tenants themselves fighting for survival in the retail realignment.
L Brands, the parent of Victoria's Secret, PINK and Bath & Body Works, is the No. 1 tenant in terms of revenue to CBL in 2019, according to a recent Securities and Exchange Commission filing by the company that owns Hamilton Place and Northgate malls in Chattanooga.
L Brands had 128 stores in the more than 100 centers CBL operated as of the end of 2019. That company accounted for 4.25% of CBL's total revenues last year, the filing said.
But L Brands has unveiled plans to close about 250 Victoria's Secret and PINK stores in the United States and Canada in 2020, or about 25% of its units in the region. Also, the retailer is planning on shutting 50 Bath & Body Works this year.
Already, the company has decided to not reopen Victoria's Secret and PINK at Northgate Mall.
Signet Jewelers, which runs Kay, Zales and other stores, is CBL's No. 2 retailer with its 156 units accounting for 2.87% of revenues in 2019, the filing shows.
Signet announced last month that at least 150 stores of its various brands won't reopen after temporarily closing due to the pandemic. Signet also said that it will close at least an additional 150 stores.
Ascena Retail Group, the parent of Ann Taylor, Loft, Lane Bryant, Justice and Catherines stores, filed for Chapter 11 bankruptcy earlier this month. It's No. 6 among CBL's top tenants last year with 114 stores generating 1.52% of revenue, the filing said.
Ascena plans to close all its Catherines units across its business, including one adjacent to Hamilton Place mall, and other select stores among its offerings nationally.
CBL’s TOP TENANTS
Top tenants based on percent of revenue to the shopping center company in 2019:
1. L Brands
2. Signet Jewelers
3. Foot Locker
4. AE Outfitters Retail Co.
5. Dick’s Sporting Goods
6. Ascena Retail Group
8. Genesco Inc.
9. The Gap Inc.
10. Luxottica Group
Forever 21, which sells inexpensive, trendy clothes and accessories, is No. 14 on CBL's list. Its 19 stores accounted for 1.1% of CBL revenues last year, according to the filing.
Forever 21 earlier closed its Hamilton Place store. It filed for bankruptcy in late 2019 and planned to close as many as 178 U.S. stores.
JC Penney is No. 16 for CBL, with 47 stores and revenues making up 0.95% for the company, according to the SEC filing.
The bankrupt department store expects to close more than 260 locations, most of those by the end of the summer.
The Children's Place Retail Stores is No. 21 for CBL, having 41 stores at the end of 2019 and accounting for 0.76% of revenues, the filing said. The retailer's executives have said 300 of its stores will permanently close in the next 20 months. One at Northgate already has shut down.
Nick Shields, senior analyst for investment research firm Third Bridge, said the market is effectively paring back the number of malls nationwide amid a shift to online buying from traditional department stores.
"It's a painful transition in a lot of ways," he said. "Mall and store closings are never fun, especially if you're getting laid off."
Shields said that while what's happening isn't new to the industry, it was set up by the pandemic.
More than three weeks ago, CBL first entered into forbearance agreements over some of its debt after the company said it chose not to make interest payments of $18.6 million and $11.8 million. The company is in talks with lenders after the sharp downturn caused by the temporary closing of malls and retail stores earlier this year amid the coronavirus outbreak.
In May, the company posted a first quarter net loss of $133.9 million, compared to a net loss of $50.2 million a year ago.
Also in May, CBL reported it received just 27% of billed cash rents for April and its May collection rate likely will be in the 25% to 30% range amid closings during the outbreak.
In June, CBL said there was "substantial doubt" it will continue to operate as a going concern.
Earlier this month, CBL's shares plunged after Bloomberg reported the company may be preparing a bankruptcy filing.
Contact Mike Pare at email@example.com. Follow him on Twitter @MikePareTFP.