SHOPPERS could soon lose a Target and Costco location amid a popular mall’s financial woes.
The Westfield location, one of the biggest in the United States, could close in the coming months.
Shoppers could soon see an iconic mall close for good (stock image)GETTY Fox5The Westfield Wheaton mall has defaulted on a multi-million-dollar loan[/caption] Fox5It houses a Costco, Target, Dick’s Sporting Goods, and more[/caption]Decisions are still being made about the future of the Westfield Mall in Wheaton, Maryland, only 10 miles north of downtown Washington, DC, per Fox affiliate WTTG.
Built in 1958, it was previously known as Wheaton Plaza for decades.
Unibail-Rodamco-Westfield, which owns what is now Westfield Wheaton, recently defaulted on a loan worth $235 million.
Experts speculate that the company could be using the defaulted loan as a negotiating tactic to decrease its debt burden, or that it wants to get rid of the mall altogether.
John Carroll, head of advisory at Coresight Research, said the possible shutdown could provide ample redevelopment opportunities for the local community.
“It is tough on the community, but at the same time, it presents this opportunity for redevelopment,” he told WTTG.
“That’s the other big trend coming along here. If this isn’t the mall the way it used to be, with shops I don’t care to go into, then what can I turn it into?”
Still, Carroll emphasized that the closure was not definite by any means.
“It might not go away,” Carroll added.
“I want to be clear, lots of times these types of companies will threaten to go out so they can renegotiate the terms of their debt.”
The mall currently has an occupancy that’s 90% full, with major retailers like Costco, Target, and even Dick’s Sporting Goods inside.
Despite the business that those three giants likely draw and the rent they pay the mall owners, it’s likely not enough for the loan.
That could put not only the mall, but the Costco, Target, and Dick’s Sporting Goods in jeopardy should it close.
Westfield said in a statement to the news outlet that “the debt has matured, and we are engaged in discussions with the lender as we explore all options.”
US braces for '45,000 store closures'
Some 45,000 bricks-and-mortar stores could close in the next five years, experts have warned.
Several major retailers have announced store closures or gone out of business altogether in recent years.
In 2023, chains such as Foot Locker announced plans to close up to 400 outlets by 2026.
While, other well-known retailers like Tuesday Morning and Mitchell Gold + Bob Williams filed for bankruptcy in 2023.
Bed Bath & Beyond has closed all of its brick-and-mortar stores and is now an online-only retailer.
The most affected retailers have been clothing, consumer electronics, sporting goods, hobby, book, music, and home furnishing stores since the start of 2019.
UBS has predicted the total number of retail stores will drop by 45k from 958k to 913k.
Despite that, the report says that certain stores should thrive while others decline.
It said retailers such as Walmart, Costco, Home Depot, and Target, could be among the winners.
MALL MADNESS
Malls have been struggling in general for years now.
About 1,170 closed nationwide between 2017 and 2022, per data from Capital One Shopping.
A rise in e-commerce, inflation, and changes in consumer habits are all contributing factors.
The past year has also held several bankruptcies for predominantly mall-based retailers.
Forever 21 filed for Chapter 11 bankruptcy protection for the second time in its history and will close its remaining stores.
Express also went under in April of last year and closed around 100 locations in malls.
Sneaker chain Soleply is set to have only one location remaining in a New Jersey mall after its bankruptcy.
Even department stores like Macy’s are moving toward smaller formats and axing some mall-based locations.
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