CBL Properties' chief executive said Wednesday that sales are higher than before the pandemic at the Chattanooga-based company's malls and shopping centers and foot traffic is roughly back to 2019.
"If the pandemic proved anything, it's that retailers need stores," said Stephen Lebovitz, CEO of one of the nation's largest mall operators, including Hamilton Place and Northgate Mall in Chattanooga. "Retailers need stores. Online is not the only way people shop. We're social. We want to get out, eat out."
Also, with the company's exit from bankruptcy protection in late 2021, CBL is looking to grow and add personnel, he said in an interview at the company's East Brainerd headquarters. The company employs 450 nationally and about half that number in Chattanooga, Lebovitz said.
After cutting back before the pandemic and with CBL's restructuring, the company trimmed down to "a very thin staff," he said.
But Lebovitz said CBL came through the bankruptcy with cash and a lot less debt and it has made progress since then to strengthen its finances to give it the opportunity to redevelop its properties and do more, Lebovitz said.
"That will require us to build back the team," he said, adding he's "incredibly appreciative" of CBL's employees.
"The team stuck together," he said. "Everyone's excited about our prospects."
Lebovitz said a key step was to last month declare a dividend, its first since 2019.
"We want to be conservative and maintain a cash balance but we also want to distribute cash to shareholders," he said, adding the company has "done a ton" since exiting bankruptcy last November.
Still, CBL and the retail industry in general face potential headwinds from inflation and higher interest rates.
On Wednesday, the federal government reported that the consumer price index soared 9.1% from a year ago. That marked the fastest rate for inflation since November 1981.
The National Retail Federation said it supports federal measures to ease inflation, such as legislation to address supply chain and port disruptions that existed even before the pandemic.
"Retailers and thousands of other businesses depend on the global maritime transportation system to move goods through the supply chain every day and continue to face significant challenges, including unfair business practices by ocean carriers," said David French, senior vice president for government relations, in a statement.
Lebovitz said that while there are negative economic headlines, the company hasn't seen a slowdown in sales at its centers. Also, unemployment is at record lows and workers have seen growth in wages, he said.
"A lot of stores are doing well this year selling clothes for work, occasions, events. That hasn't abated at all," the CEO said. "People are making up for lost time, the last couple of years."
Concerning holiday sales, Lebovitz said he's "cautiously optimistic."
He added that as interest rates are rising, about a third of CBL's debt is rate sensitive. Refinancing decisions the company made earlier were done because officials knew rates were going up, Lebovitz said.
On Wednesday, CBL announced it has completed redevelopment projects at Kirkwood Mall in Bismarck, North Dakota; Sunrise Mall in Brownsville, Texas; and Cross Creek Mall in Fayetteville, North Carolina, with more planned in the coming months.
"Over the last several years, we have invested in our properties to transform vacant anchor space, underutilized parking lots and land parcels into new, exciting uses that add value to our properties," Lebovitz said. "During the first half of 2022, we celebrated the addition of new-to-market dining, entertainment and retail options in locations across our portfolio."
Since 2017, CBL has completed nearly three-dozen anchor redevelopment projects totaling approximately 3 million square feet, according to the company. CBL's portfolio has 95 properties totaling 59.6 million square feet across 24 states.