Malls in Argentina expect closure on 20% of their locations, claim to be reaching "a terminal situation"

The increase in the curve of coronavirus infections in Agentina has put the brakes on all possibilities of new openings, and the malls industry is worried about their high maintenance costs and the uncertainty of when they will be able to operate again.

"The situation is terminal. It is a crisis that is deepening day by day. Even if we open tomorrow we know that at least 15% or 20% of the premises will not come back. And if the quarantine continues the disaster will be total," the Argentine Chamber of Shopping Centers (CASC) told LPO.

It is a highly important economic sector, in which more than a thousand companies operate through these establishments that generate more than one hundred thousand jobs, without including the entire value chain in the textile industry, for example.

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The business model is based on rentals charged due to the importance in terms of sales and exhibition that it represents for the establishments. The problem is that both rents and expenses go unpaid in many cases, even though some businesses claim that they are still being billed.

"We have already closed in Canning, in Unicenter (of Cencosud), where half of the stores also left. Hopefully we will stay with two or three places, but if this extends a few more months we will be left with nothing," confessed one of the shops that began a major personnel reduction.

"We held on through March and April, but in May we couldn't pay our salaries. We have a very significant cost of office space and we had to dismiss 180 employees and suspend another 200," they said.

On the other hand, another of the premises consulted by this outlet underlined that they are not paying rent, but they are still paying expenses, which amount to US$2,800 per month plus VAT.

Cencosud and Irsa, the leading malls chains, suffered a stock market drop of 45% in March and, unlike other companies, was only able to recover a small part of that loss. In fact, in the last three days it collapsed again by almost 20%.

"The advantage Irsa had is that by having its client portfolio assembled it was much easier for them to expand to new shopping centers, where brands are almost forced to be because they work as showrooms. Many times they barely make money, but it is a fundamental window display. Now the situation has changed completely," explains market analyst Francisco Uriburu.

Given this situation is that in the chamber is asking for meetings with the government to establish lines of assistance and accelerate the opening. "We have a protocol endorsed by Dr. Stamboulian's Center for Infectological Studies. It is very strict, we are in a position to offer the best security conditions," they say.

In that sense, they add that "at least", they would have to enable the take away operation. "It is no longer 10% or 15% of sales. But at least it's a palliative that contributes to having a daily income and there's no risk in going to get the product from the shopping center's parking lot".