The chairman, president and chief executive officer of Taubman Centers Inc., a real estate investment trust, said Friday on the company’s second-quarter conference call to Wall Street analysts that June was the firm’s best month in the quarter as nearly all centers posted sales increases. “A wide range of retailers contributed to this growth,” he said, citing Gucci, Louis Vuitton, Versace, Jimmy Choo and Prada among the best performers. He said traditional mall tenants such as American Eagle, Gap, Pink, Apple, Uniqlo, Lululemon, Steve Madden, Eddie Bauer and Hollister also “posted strong results, well above the portfolio average in our centers.”
According to the chairman, sales per square foot are now up over 2 percent year-to-date. And while there have been some store closures due to bankruptcy filings — The Limited; BCBG; Bebe; Payless; Wet Seal; Yogasmoga; Papaya; True Religion and Calypso — Taubman said of the 317,000 square feet that was connected to the 59 locations being shuttered, the REIT has already released 197,000 square feet to new tenants.
He added that during the quarter, the company opened over a dozen new tenants, including Tesla, Harley-Davidson, Billabong, Skechers and House of Samsonite, as well as new eateries.
“Throughout our planning, we envisioned food as a key destination and a meaningful source of traffic for the center. As these restaurants have opened, we’re pleased to see that vision is coming to life,” Taubman said.
The chairman reminded analysts, “Remember, bricks-and-mortar is the heart of omnichannel retail. And by most estimates, about 90 percent of all retail spending is done in a physical location.”
He acknowledged that “retail is evolving, and no one knows exactly where the transition will take it, but we feel strongly our company is well positioned. The highest-quality real estate will gain market share and outperform over time.”
For the second quarter, the REIT said it had funds from operations of $52.9 million, or 86 cents a share. The consensus of Wall Street analysts was 84 cents. FFO is considered a key metric for REITs. FFO is calculated by adding back certain items such as depreciation and amortization to net income. Taubman Centers said net income for the quarter was $13.5 million, or 22 cents a share.