Dive Brief:
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The Mall of America will lay off 211 employees and could expand furloughs of another 178 more, the Minneapolis Star-Tribune reports, citing a notice to Minnesota’s employment office. The notice is not yet posted to the state’s site.
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The mall’s woes have worsened as owner Triple Five Group leveraged the Mall of America in order to finance its newer American Dream mall in New Jersey, which has led to missed mortgage payments, according to several earlier press reports.
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Triple Five Group didn’t immediately respond to requests for comment.
Dive Insight:
With its American Dream mall in New Jersey, Triple Five spent years and billions of dollars attempting to double down on its success at experience-rich Mall of America. Instead both malls are buckling under new pressures brought on by the pandemic.
After several delays, American Dream finally started its phased opening in October. The mall touted signups from familiar retail tenants like Saks Fifth Avenue, Tiffany & Co., and fast-fashion favorites, Zara, H&M, Uniqlo and Primark. But the pandemic forced it and predecessor Mall of America to shut down a few months later as public health officials scrambled to contain the disease outbreak.
The idea behind these shopping centers is to bring more than retail to the mall, including major entertainment like fun rides and restaurants. The mall concept's decades-long decline has only been exacerbated in recent years, first by the Great Recession and now by the pandemic. In a research note last month, Retail Metrics forecast a 256% year-over-year earnings decline for mall-based retailers, compared to a 0.6% decline for off-mall stores, "a 25,610 basis point underperformance on the part of mall affiliated chains."
Financing isn't the only way the Mall of America has contributed to its newer sibling's development. In February the mall closed down Fourpost, a brick-and-mortar solution for e-commerce brands founded by Mark Ghermezian, a member of the family that runs Triple Five Group. Ghermezian at that point also took the job of co-CEO at American Dream.
