Simon says malls gross sales in June fell to pre-pandemic ranges

A Simon Property Group sign at The Westchester Shopping Center in White Plains, New York.

Scott Mlyn | CNBC

Simon Property Group saw sales in their malls and outlet centers return to pre-pandemic levels in the last fiscal quarter as Americans shopped for clothes, shoes, and other items.

David Simon, chief executive of Simon Property, told analysts on Monday that retail sales in his properties in June were on par with June 2019 levels, up 80% year over year. In parts of the United States, sales were above 2019 levels, he added.

The largest malls owner in the US hopes improving trends will drive companies to sign new leases. The company has tried to fill spaces vacated by brands that either went bankrupt or had to close stores.

For the three months ended June 30, Simon Property had an occupancy rate of 91.8%, compared to 92.9% last year and 94.4% two years ago.

“We continue to see demand for space across our portfolio, from healthy local, regional and national tenants, entrepreneurs, restaurateurs and mixed-use demands … it is increasing day by day,” said David Simon.

“We still have a hole to dig because of the bankruptcies we faced during the pandemic,” he added. “But I am very happy with the activity.”

Simon shares rose nearly 3% in extended trading. The stock is up more than 48% since the start of the year. Simon Property Group has a market capitalization of $ 41.5 billion.

Retail industry watchers expect a strong back-to-school season as kids look forward to returning to the classroom and adults returning to the office. In the past few days, retailers from Kohl’s to Home Depot have re-imposed mask requirements on workers in hopes of containing a recent surge in Covid-19 cases. A highly contagious Delta variant has spread mainly among unvaccinated Americans.

When asked about the Delta variant, David Simon said the company will not mandate vaccines for buyers and renters but will continue to encourage them.

“We didn’t see a spike in Covid cases in a closed mall,” he said. “We have to mask ourselves. We will mask. And I think the consumer … is moving forward in this environment right now.”

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