According to U.S. mall landlords, the rumors of the death of bricks-and-mortar retail are greatly exaggerated, Bloomberg News reported yesterday. Bleak earnings forecasts from department-store companies including Macy’s Inc. and Nordstrom Inc., along with bankruptcy filings by firms including Sports Authority Inc. and teen-clothing chain Aeropostale Inc., have rattled investors in retail landlords. A Bloomberg index of regional mall landlords, which includes the shares of Taubman and Simon Property Group Inc., has dropped almost 8 percent in two weeks through Tuesday, double the decline in the broader Bloomberg Real Estate Investment Trust Index. Retailers are being hurt by the continued use of Internet shopping, changes in consumer tastes and declining visits to big-city shopping districts by tourists deterred by the strong dollar. Retail rents on Madison Avenue in Manhattan have fallen to $1,644 a square foot on average, down 3 percent from last year, according to a report this month by the Real Estate Board of New York. Sales have suffered this year at malls that rely on shoppers from Europe and Latin America, said Taubman, whose properties include high-end destinations such as the Mall at Short Hills in New Jersey and Beverly Center in Los Angeles. Spending by travelers from China hasn’t dropped off much, he said. Despite the turmoil, demand for space has held up, Kimco Realty Corp. Chief Executive Officer Conor Flynn said. The market will get more clarity on retailers’ demand for space when Sports Authority auctions off its stores, Flynn said. Once the largest U.S. sporting-goods retailer, the company filed for bankruptcy in March after saddling itself with $643 million of debt.
