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October 24, 2018

Mall landlords sue to limit Sears sale frenzy

Photo | Contributed A Sears storefront.
By Liese Klein

The owner of the Connecticut Post Mall is among five mall landlords suing bankrupt retailer Sears over signage and sales related to recently announced store closings, seeking to prevent their properties from being negatively impacted by an “Everything Must Go” sales blitz.

The suit, filed in U.S. Bankruptcy court in New York, seeks to limit the size and scope of the retailer’s going-out-of-business activity. Bankruptcy-related sales could hurt other stores at the impacted malls, the landlords assert. “A store closing sale or liquidation detrimentally impacts the Centers, as well as the surrounding individual tenants,” the filing states.

Limits on signage and sale hours in existing mall leases should be upheld by the court during the Sears bankruptcy, argued the filing. Landlords asked for the size of signs to be limited, as well as the hours of sales. The wording of signage was also discussed in the filing.

“Landlords do not object to the use of the term ‘Store Closing Sale’ in advertising the sales. Landlords do object to the use of such terms as ‘Going Out of Business’ and ‘Total Liquidation Sale’ as such advertisement is confusing to shopping center customers. Additionally, signage should not contain language such as ‘court ordered sale,’ ‘bankruptcy sale,’ ‘Chapter 11 sale,’ ‘everything must go,’ or ‘lost our lease.’”

Five landlords representing 12 malls in nine states participated in the action, filed on Monday. Centennial Real Estate, which owns Milford Post Mall, took part in the filing and currently leases to Sears store No. 1134, slated to close by the end of the year. Other landlords represented including Macerich, C.E. Johns Co., Brixmor Operating Partnership and S-Tract LLC.

Contact Liese Klein at lklein@newhavenbiz.com

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