Neiman Marcus ($PRIVATE:PRIV_NEIMANMARCUS) has weathered slowing foot traffic and e-commerce competition as a so-called "retail apocalypse" threatens the stalwart retail brand from virtually every angle.
But now the Coronavirus shut-down has the luxury retailer looking bankruptcy in the eye. The Dallas-based company is reportedly in talks with debtors — to whom it owes an estimated $4.3 billion — about a bankruptcy filing that, while it would allow the company to continue operations, will almost certainly include targeted store closures as a way to reduce operating costs.
With store closures come not just job losses, but also sudden drops in tenant revenue for REITs, the landlords of retail, who will be stuck paying their own leases and mortgages. Among the most leveraged in Neiman Marcus locations are Simon Property Group ($SPG) and Brookfield Property Partners ($BPY).
Here, we look at seven REITs that hold leases on the chain as a way to better understand which of them stand to lose the most from a looming Neiman Marcus shutdown.
Simon Property Group holds the leases on the most Neiman Marcus locations, with 30 listed as of publishing. General Growth Properties ($GGP) holds 11. Macerich ($MAC) and Taubman Centers ($TCO) list 5 Neiman Marcus stores each, and Tanger Factory Outlet ($SKT) collects rent from 1. The map below shows where they all are, color-coded by REIT.
As Neiman Marcus has shored up locations in recent years, Simon's exposure to the brand has decreased: in 2017, it listed 47 locations in its tenant list. As of this week, it lists 30. The set of time series below describe the number of Neiman Marcus locations per REIT over time as a way to understand risk over time should Neiman shutter stores in the near future.
Risk per REIT is, of course, difficult — if not impossible — to quantify or predict without more context, and would be foolish to quantify based on one tenant. Indeed, each REIT listed here has a diverse portfolio of tenants, business types, and locations, as shown in the objective map below, described by both REIT (color) and size of the circle (square footage per location).
About the Data:
Thinknum tracks companies using the information they post online - jobs, social and web traffic, product sales and app ratings - and creates data sets that measure factors like hiring, revenue and foot traffic. Data sets may not be fully comprehensive (they only account for what is available on the web), but they can be used to gauge performance factors like staffing and sales.
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