Ax falls for Sears at North Riverside Mall | Articles | News

Sears will close its doors for good at the North Riverside Park Mall, 7501 Cermak Road, by the end of September, ending its nearly 20-year run at the shopping center.

Liquidation sale signs appeared inside and outside the store June 25, with merchandise discounted between 20 and 70 percent and all store fixtures for sale.

Sears, which was purchased out of bankruptcy by its chairman Eddie Lampert in early 2019, has not formally announced the store’s closing. But North Riverside Park Mall’s general manager, Harvey Ahitow, told the Landmark that it was the store’s landlord who made the call.

The north anchor property at the mall, which includes Sears on the upper level along with Amita Health and Round One on the lower level as well as some vacant retail space, is owned by Seritage Growth Properties.

Seritage is a real estate trust created in 2015 to buy all of Sears’ real estate holdings and lease back space to Sears and Kmart stores or to other businesses. Lampert is also chairman of the board of Seritage and his hedge fund, ESL Investments, owns a large stake in the real estate trust.

On June 3, Seritage amended its master lease with the company that now owns Sears, called Transform Holdco, terminating its lease with Sears and Kmart at 12 of 17 locations it owns.

At the time Seritage did not name the locations of the leases being terminated, and because he hadn’t heard otherwise Ahitow believed the North Riverside was not one of the 12.

Seritage informed Ahitow of its decision earlier this week in a conference call. He said the company gave no reason for the decision.

“They gave no explanation of why they would close before the holidays,” Ahitow said, adding that to the best of his knowledge Seritage did not have a tenant lined up for the roughly 90,000-square-foot upper floor of the anchor location.

“We’ve talked about working jointly to find a [tenant],” Ahitow said.

 

Traditional mall anchors disappearing

When Sears closes at the end of summer, it will become the third anchor tenant to have folded at North Riverside Park Mall.

When it opened in the mid-1970s, the shopping center boasted three legacy retail powerhouses as its anchors, including Montgomery Ward, Carson Pirie Scott and J.C. Penney.

It also boasted a popular mini-anchor tenant in Madigan’s, a smaller family-owned department store chain that had roots in Chicago going back a century. Madigan’s was the first to close in 1992, and its former two-story space on the west side of the mall has seen a parade of budget retailers come and go. Part of the former Madigan’s space remains vacant following the departure of Fallas in 2018.

Montgomery Ward followed suit in 2001, with Sears taking over the 180,000-square-foot anchor property at the mall’s north end a year later.

Carson Pirie Scott went bankrupt and closed all of its stores in 2019, including the 160,000-square-foot anchor space on the west side of the North Riverside Park Mall. It remains vacant.

The writing appeared to be on the wall for Sears as the Carson’s saga was playing out. Already on shaky ground for years, Sears Holdings, sought bankruptcy protection in October 2018 and by the beginning of 2019 was on life support, with the company facing liquidation.

But Lampert, who helmed Sears Holdings as it crumbled, bought the failing retailer at auction for $5.2 billion, keeping open 425 Sears and Kmart stores, including the Sears store at North Riverside, which by that time had consolidated its operations onto the upper floor of the anchor space.

With Sears’ demise, the only anchor tenant left at the mall is J.C. Penney, which itself is in the midst of bankruptcy proceedings and has announced it intended to close 242 stores.

The North Riverside Park Mall location was not among those targeted for closing in the first wave of more than 150 stores announced in early June or on a smaller closure list released last week.

Published reports have revealed that a pair of shopping mall operators, Simon Property Group and Brookfield Property Partners are exploring buying the company as they own dozens of malls where J.C. Penney stores are located.

The two companies bought the women’s clothing retail chain Forever 21 out of bankruptcy earlier this year. In 2016, Simon teamed with another mall property owner, General Growth Properties, to buy the Aeropostale clothing retailer.

 

Contact:
Email: buphues@wjinc.com Twitter: @RBLandmark

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