One of N.J.’s largest mall owners just issued a dire warning about more store bankruptcies

The largest mall owner in the United States, which manages several of New Jersey’s busiest malls, predicts the Trump administration’s tariffs could lead to more retailer bankruptcies this year.

On a fourth-quarter earnings call last week, Simon Property Group officials said the tariffs were “clearly having an impact on retailers,” adding that smaller chains were particularly feeling the pinch.

“This may be putting more pressure on retailers than it should be and ultimately hurting small businesses,” said David Simon, CEO of Simon Property Group.

The Indianapolis-based company owns several major shopping destinations in New Jersey, including Short Hills Mall, Jersey Garden Mills Mall, Menlo Park Mall and Rockaway Town Square, as well as premium outlet centers in Blackwood, Jackson and Tinton Falls.

Luxury retailers pull back on ‘American dream’ in latest setback

Saks opened in East Rutherford Mall in 2021 and occupies nearly a third of the luxury corridor, which includes Gucci, Hermes and Dolce & Gabbana.

As the retail industry continues to see high-profile bankruptcies, warnings of potential trouble ahead come. Saks Global, which includes Saks Fifth Avenue, Bergdorf Goodman, Neiman Marcus, Last Call and Horchow, filed for bankruptcy protection in January and closed discount stores in Bridgewater, Shrewsbury and Elizabeth.

Saks Global announced this week that it will close its luxury Saks Fifth Avenue store at American Dream Mall.

It joins a list of national chains that have struggled over the past decade, including JC Penney, Sears, Neiman Marcus and Lord & Taylor.

According to retail analysis firm Coresight Research, more than 8,100 stores will close in the United States by 2025, an increase of about 12% from the previous year. Many of the closures involve mall retailers such as Claire’s and Forever 21.

In New Jersey, some malls and malls are feeling the impact as retailers continue to downsize. Macy’s announced last month that it would close its store at Livingston Mall and a mall in Ramsey as part of a restructuring plan. With only a few stores still open, Brunswick Square Mall in East Brunswick officially closed in January as the property undergoes redevelopment.

Retail companies face pressure from tariffs as President Donald Trump expands levies on imported goods. Duties are usually charged as a percentage of the value of the product. The president believes the measures will boost domestic manufacturing and generate federal revenue, but critics and retailers say the added costs are increasing expenses throughout the supply chain.

Executives at several major companies have spoken publicly about the impact of tariffs. Walmart executives said that while sales have remained steady, tariffs are increasing costs. Amazon has reportedly raised prices on thousands of low-priced items this year. Target also warned that uncertainty over tariffs could hurt profits as consumers become more cautious.

However, Simon executives said their properties, which include more than a dozen shopping destinations in New Jersey, continue to perform well despite tariff challenges.

“The most important thing is that traffic is up, sales are up,” Simon said by phone.

The company reported that its U.S. shopping malls and premium discount stores had approximately 96% occupancy at the end of the year, with average retailer sales of $799 per square foot. Executives said leasing demand remains strong and the company expects to make up space if more retailers close.

“Those retailers that didn’t make it, although I could sit here and blame the tariffs, they were not productive retailers,” Simon said. “We think we can replace them with more efficient retailers that offer higher rents.”

But not all New Jersey malls appear to be doing well.

An entire wing of the Namdar Realty Group-owned Hamilton Mall was empty, with Macy’s the only remaining anchor department store in the once-thriving Atlantic County mall. Livingston Mall has also seen decline in recent years, with most storefronts vacant and parking lots deteriorating. The property was previously owned by Simon and was sold to Kohan Retail Investment Group in 2022.

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