The owner of East Towne and West Towne malls in Madison filed for bankruptcy protection Monday, hammered by the COVID-19 coronavirus pandemic that has forced their tenants to permanently close stores or not pay rent.
The malls, owned and operated by Chattanooga, Tennessee-based CBL, will remain open as the bankruptcy protection process continues.
East Towne and West Towne malls closed in March for nearly two months following Gov. Tony Evers’ stay-at-home order that shut the doors on nonessential businesses as the coronavirus spread in Wisconsin. Statewide restrictions were eased in May and ultimately thrown out by the state Supreme Court, but Dane County’s health department placed capacity restrictions on businesses including retailers.
CBL, which operates 107 malls across the country, said more than 30 of its tenants have filed for bankruptcy protection this year and are shutting stores, including woman’s clothing retailer Ascena, which has 100 Ann Taylor, LOFT and other stores in CBL malls.
Even before the virus, malls have struggled to attract shoppers who are increasingly shopping online or elsewhere. But the pandemic forced many of them to temporarily close for months. Mall tenants, which operators rely on for rent payments, are also stressed. Some are going bankrupt and closing stores, such as department store chain J.C. Penney.
Another mall operator, Pennsylvania Real Estate Investment Trust, also filed for bankruptcy protection Monday.
The two bankruptcies come just before the crucial holiday shopping season. With reported coronavirus cases rising, malls will need to limit crowds during what is traditionally their busiest times of the year. At the same time, big retailers that didn’t have to close during the pandemic, such as Amazon, Target and Walmart, are benefiting as they push people to shop online.
Like other malls looking to attract shoppers, PREIT has added restaurants, movie theaters and gyms to its malls in recent years, which now account for about 24% of its tenants. But those establishments have been hit harder by the pandemic and have stricter rules on how many people can visit.
State Journal reporter Shelley K. Mesch contributed to this report.
From the State Journal archives: West Towne opens in 1970