CBL’s Stephen Lebovitz on retail in the ‘20s
Like all big mall owners, the last couple of years have been a roller coaster ride for CBL Properties and its CEO Stephen Lebovitz. Filing for Chapter 11 in 2020 to restructure its balance sheet and eliminate debt, CBL emerged in 2021 to continue refreshing its properties with additions as revolutionary as a Live! Casino anchor at its Westmoreland Mall outside of Pittsburgh. We checked in with Stephen to find out what might be new in ’22.
What kinds of things do your traditional retail tenants need to focus on to flourish in the years ahead?
The most important thing retailers need to do is to focus on customer experience. Shoppers still like to go to stores because they can get associates help to find what they are looking for and they can see what they are buying. We have seen stores benefit from buy-online, pick-up-in-store in the last year which is way to offer convenience to the customer. In the current environment, staffing continues to be a major challenge for retailers. I recently visited 10 of our malls and saw many of the stores understaffed. This has impacted the level of service and operating hours. If shoppers can’t find what they want or they can’t check out quickly, they get frustrated, so retailers have to find ways to satisfy shoppers.
It’s always been tough for retailers to hire good associates. Is it even harder now?
It’s definitely competitive. First and foremost, you’ve got to take care of your team. It’s important to invest in the workforce and make sure that they have career paths. You have to constantly enhance your company culture. It’s a good time to get active with diversity, equity, and inclusion initiatives. You want your team to feel the company is not static, that all of them are supported by their managers in ways that are important to them.
CBL has been very active with DEI initiatives lately.
Yes, we have BLCK Market in the Pearland Town Center outside of Houston. It’s an incubator for a diverse group of Black entrepreneurs in the area to showcase and sell their products in a local mall. At our mall in Chattanooga, we recently held a Black-Owned Business Expo. We had 25 business owners participate. The mall was packed with customers and the vendors received great exposure. The event was a win-win with retailers, food court, and other stores around the mall reporting increases in traffic and sales. We’re going to do this at three more malls, and we’re looking at expanding it to include Veteran-Owned businesses and Women-Owned businesses.
The pandemic was a challenge to you and all other operators of enclosed shopping centers. How have you emerged?
2021 was one of the strongest years we’ve had in our company’s history. There were virtually no new retailer bankruptcies. Department stores like Dillard’s and Macy’s reported great sales per square foot and profits. The mall model is working – customers in our communities want to shop in person, but we’ve had to evolve, be more creative. The narrative that malls are dead was really dispelled last year. We have demand from so many kinds of uses--restaurants, entertainment, value, medical, service, hotels and residential. We are more excited than ever about the future of our properties and our business.