Mall owners want to limit Sears sales signs

Sears filed for Chapter 11
bankruptcy protection on October 15.

Seph Lawless; Skye
Gould/Business Insider

Mall owners are asking a New York
bankruptcy court to crack down on Sears’ “going out of business”
signs in an attempt to curb the impact of the retailer’s
downfall.

In a recent
court filing, a group of landlords laid out their requests
for Sears’ upcoming store cloures in 12 of
their malls. 

The mall owners requested that
the court limit the size, wording, and style of its closing-down
sale signs. 

“A store closing sale or
liquidation detrimentally impacts the Centers, as well as the
surrounding individual tenants,” the mall owners said in the
court filing.

“Shopping center tenants bargain
for a certain environment as part of their decision to lease
space in the Centers, and all tenants agree to abide by similar
rules regarding sales and signage to protect this
environment.”

The five landlords — The
Macerich Company, Centennial Real Estate, C.E. Johns Company,
Brixmor Operating Partnership,  and S-Tract LLC — which
jointly filed the objection on Monday, said that terms such as
“going out of business” or “total liquidation sale” are confusing
to mall shoppers and shouldn’t be used.

They also requested that signs
that say “court-ordered sale,” “bankruptcy sale,” “Chapter 11
sale,” “everything must go,” or “lost our lease,” should be
banned along with any loud advertising of the sales, such as
balloons, sandwich boards, leaflets, or flashing lights.

“Landlords have a primary
interest in maintaining an aesthetic appearance in the shopping
centers for the benefit of all tenants, especially during the
holiday season,” the court filing said. “Signage limitations are
critical to maintaining the desired appearance and environment
and reasonably restrict any store closing sale.”

Sears is closing 142 stores
before the end of the year. These store closings will likely have
a detrimental impact on the malls in which they are located,
especially in cases where Sears acts as the anchor
store. 

A report done by
Credit Suisse in 2017 estimated that 20-25% of malls
would shutter over the next five years, largely because of store
closures that are taking place across the retail sector. 

Read the landlords’ objection here: