JOSEPH PISANI - AP Retail Writer
NEW YORK (AP) — The nation's largest owner of malls is backing out of a $3.6 billion deal to buy a major rival as the coronavirus pandemic shakes the retail economy.
It is the second major retail deal that was signed just before the pandemic hit the U.S. to crumble. The sale of Victoria's Secret to a private equity group fell apart Last month.
In early February, Simon Property Group said it would buy Taubman Centers, just weeks before the Centers for Disease Control and Prevention announced that a California patient was being treated for coronavirus, the first known case in the U.S.
The plunge in sales for retailers since then has been unprecedented. J.C. Penney, Neiman Marcus and J.Crew, have all filed for bankruptcy protection this year.
On Wednesday, shares of any retail chain with stores in malls plummeted as well. Kolh's, Macy's, The Gap and Abercrombie & Fitch all slumped sharply.
As many as 25,000 stores are expected to close this year, more than double last year's count, according to Coresight Research, which tracks store openings and closings.
On Wednesday, Simon said Taubman’s properties, which have high-end stores and are in or near big cities, "disproportionately" affected its business due to the COVID-19 pandemic.
Simon owns or has a stake in 204 properties in the U.S. as of last year. Taubman Centers owns, manages or leases 26 shopping centers in the U.S. and Asia, including The Mall at Short Hills in New Jersey, and Waterside Shops in Naples, Florida.
Taubman Centers Inc. did not immediately respond to a request for comment Wednesday morning.