The owner of the largest shopping malls in both Bismarck and Minot is running out of money — and bankruptcy is looming on the horizon.
It’s a problem facing malls across the country because of the COVID-19 pandemic.
With foot traffic at shopping malls virtually nonexistent for months in the spring thanks to the coronavirus, the tidal wave of debt it created is simply too much for some companies to ride out.
Like CBL, the seventh largest operator of shopping malls as of last year.
And to make matters worse, malls were already facing an uphill battle due to online shopping and businesses like Amazon.
KX News sat down with Dr. Karel Sovak, the Dean of the Tharaldson School of Business at UMary. He says CBL won’t be the last company to go through this.
“You have some of your major retailers that have already filed bankruptcy, which has affected most tenants within those malls. While there might have been a demise of a lot of stores in general, and traffic in the malls, it really is just a way for a business, which is what CBL is to restructure themselves so that they can have a better standing to sustain themselves far into the future,” said Sovak.
KX News reached out to CBL for comment and they say:
“CBL, the owner of Kirkwood Mall, announced that it has entered a restructuring support agreement (RSA). The RSA sets out the terms by which CBL will pursue a comprehensive restructuring allowing the company to eliminate debt, lengthen its maturity profile and simplify its capital structure. In order to implement the terms of the RSA, we expect to file for voluntary Chapter 11 protection by October 1. These plans will help to strengthen CBL’s balance sheet and organization and importantly, operations at all of our properties will continue as normal.”
But that bankruptcy could still result in selling some of their more than 100 properties in 26 states, but which locations is still anyone’s guess.
While malls across the country may be struggling, the Kirkwood Mall in Bismarck is actually doing quite well. Now, it is one of two CBL owned properties in North Dakota with the other being the Dakota Square Mall in Minot, and mall officials here we spoke with tell us they’ve actually seen an increase in shoppers over the past few months.
CBL has owned the Kirkwood Mall since 2013. Mikalah Auer is the mall’s marketing director.
“Our traffic has rebounded greatly since the pandemic. You know, we’ve seen a little bit of a decrease over last year but a lot of the people that are coming in are shopping, which is awesome so our conversion rates are very high right now,” said Auer.
And if you’re concerned about CBL and the mall as we head into the holiday season, there’s nothing to worry about.
“No, it has no impact on the mall’s operations, so we are continuing as normal,” said Auer.
It’s also important to note, whoever takes ownership of the mall in the future, will not close it, as the mall employs one to two thousand jobs and contributes greatly to the local economy.
“A shopping experience is a social engagement and that’s what malls or any type of shopping aspects have to take on is what do consumers want. I think that’s what you’re going to be seeing is a lot more of these malls trying to find those lures of people that will bring them into a social engagement and that’s what’s gonna help them survive,” said Sovak.
Mall officials tell us they are still working out details for the holiday season such as if Santa will be around or not.