LIMA – Washington Prime Group, the Columbus-based owner of malls like Lima Mall, appears to be nearing bankruptcy.
In its fourth quarter earnings report released earlier this week, Washington Prime said, “There are significant doubts about the company’s ability to continue business.”
The announcement was the last in a series of bad news for Lima Mall, which celebrated its 55th anniversary earlier this year but was struggling with the loss of anchor stores.
Sunday is the last day Macy’s will be open. Two other anchor stores have closed in the past five years: Sears in May 2018 and Elder Beerman in January 2016. JC Penney will be the only remaining anchor in the Lima Mall, but he too has a bleak future. JCPenney closed 154 stores in 2020 after filing for Chapter 11 bankruptcy protection in May this year. Store closings amounted to 30 percent of the retailers’ 846 branches.
Washington Prime spokesman Kim Green downplayed the latest news and told The Lima News the company remains committed to Lima.
“We expect normal business in our city centers, including the Lima Mall. Washington Prime Group does not expect this process to materially affect our operations, “Green said in a statement emailed. “Lima Mall will continue to serve our guests, and guests will not notice any changes in our operations. We plan to continue to operate normally, with an emphasis on the health and safety of our guests, retailers, employees and society. “
In addition to the Lima Mall and the Lima Center, the Washington Prime Group owns eight Ohio centers: Polaris Fashion Place outside of Columbus; Indian Mound Mall in the heather; the mall at Fairfield Commons in Beavercreek; Dayton Mall; New Towne Mall in New Philadelphia; Great Lakes Mall in Mentor; and Southern Park Mall in Youngstown.
For all of 2020, Washington Prime lost $ 233.8 million, compared to a loss of $ 11 million in 2019.
As with other shopping center operators, Washington Prime generated revenue last year from tenants who were unable to pay full rent or simply closed down during the pandemic. Dozens of retailers signed up for Chapter 11 in 2020, including many malls like Brooks Brothers, J. Crew, Pier 1, Aldo, and GNC.
Washington Prime rental income declined from $ 633.6 million in 2019 to $ 506.7 million in 2020.
Washington Prime said it had an agreement with creditors extending the deadline for paying a missed $ 23.2 million interest payment in February to March 31.
However, the company doubted it would be able to meet the deadline and bypass Chapter 11.
“The company continues to negotiate and discuss the restructuring of its capital structure,” the company said, but acknowledged “the uncertainty associated with the company’s ability to meet these commitments.”
Washington Prime announced that its talks with lenders included bankruptcy in addition to renegotiating loan terms.
“While the company remains open to any discussion with the holders of the Notes and their other stakeholders about a possible reorganization, there can be no guarantee that the company will reach an agreement.”
Washington Prime’s challenges were outlined in its earnings report, which shows the company lost $ 111.4 million, or $ 5.24 per share, for the last three months of the year, compared to a profit of 17 $ 1 million (81 cents per share) over the same period in 2019.
Washington Prime is among the many mall owners struggling during the pandemic as consumers shopped online rather than in person. In November, two companies, CBL Properties and PREIT, which together own 130 malls, signed up for Chapter 11. That same month, Simon Property Group announced that two malls, including the one at Tuttle Crossing in Dublin, could be admitted to bankruptcy.
Washington Prime’s challenges at Polaris were compounded this month by two shootouts that forced the mall to be temporarily evacuated.
Washington Prime operates 100 shopping centers with a focus on the Midwest, East Coast and Florida.
The company’s stock closed at $ 2.82 per share on Thursday, down from nearly $ 15 per share in late January.
A sign on Thursday in Macy’s store in the Lima Mall indicates that it will only be open for four more days. The last day it is open is Sunday. Washington Prime Group, the owners of Lima Mall, announced this week that their talks with lenders included bankruptcy in addition to renegotiating terms on their loans.
Jim Weiker of The Columbus Dispatch contributed to this report.