RECENT RETAIL CLOSURES
Written by: Gilli Zofan
Gilli Zofan brings over 14 years of experience to the real estate industry focusing on both the leasing and sale of retail properties. To date, Gilli has completed over 600 transactions totaling over $200M. His vast knowledge of the industry makes him an expert in the field. Keep reading to get Gilli’s take on what recent retail bankruptcies and closures mean for the future of the sector.
There have been a lot of retail bankruptcies announced in the past few months. Have you noticed any trends in the bankruptcies we’ve seen recently?
Many retailers and restaurants that were already struggling pre-COVID have been the hardest hit. Many of the bankruptcies were already on watch lists. As we continue to monitor those retailers with declining sales pre-COVID, and most of them have large amounts of debt, there are bound to be more to come. I also think a key aspect is in the operators and what actions they have taken during COVID. Take, for example, our client Swensons that had never previously used DoorDash or other similar food delivery services as part of their business model. During the pandemic, delivery offering was added and they have been very happy with the results so far. Another example is Fusion adding fresh produce and related items as part of their delivery offerings during COVID.
Do you have any predictions on other specific retailers or types of retailers that could announce closure or bankruptcy due to COVID-19?
I think movie theaters have a lot of exposure, and will find it hard to succeed under current business models. Ultimately, any operator who does not adjust their way of operating will have exposure, both local or national.
After a devastating April for retail, sales rose 28.2% in May as many restaurants and retailers started opening their doors again. With the spike in cases we’re seeing now, what is your prediction for retail re-closures, re-openings, sales, etc. for the rest of the year?
I think with it being an election year, there will be significant pressure to keep business open. I think we may see certain sectors not open or be forced to make significant changes, like college football in the fall, but I don’t believe there will be a widespread shut down of retailers and restaurants again.
Locally, we have seen restaurants and retailers forced to close due to COVID-19, but we have also seen various announcements for new restaurants/retailers planning to open. What do you think this tells us about the future of retail in Columbus?
I think many of those closures were on people’s radar already. There are always new fresh young chefs or concepts that are growing and expanding in these times and will continue to take their “clicks to bricks” model into retail. Take Allbirds or Lovepop, for example, as they continue their retail expansion. On the restaurant side, I think carry-out and drive-thru’s are going to be very hot and landlords must be willing to accommodate.