June 14 (UPI) -- Mall operator Washington Prime Group announced that it has voluntarily filed petitions for bankruptcy, citing the COVID-19 pandemic as a prime cause.
WPG, which is based in Columbus, Ohio, owns and operates 102 shopping centers across the nation. The company was spun off from the nation's largest mall operator, Simon Property Group in 2014.
"The COVID-19 pandemic has created significant challenges for many companies, including Washington Prime Group, making a Chapter 11 filing necessary to reduce the company's outstanding indebtedness," WPG said in a press release.
Lou Conforti, CEO and director of WPG, said the move will allow the company to straighten out its balance sheet. The group aims to reduce debts just under $1 billion in debt as part of the move.
WPG's financial woes are hardly isolated for shopping mall owners. The once iconoclastic sprawling complexes have largely given way to online shopping and were struggling before the pandemic, industry observers said.
WPG's move echoes projections experts have made on the outcomes COVID-19 could have in hastening the closure of underperforming shopping malls.
Coresight Research analysts and executives stated as many as half of all malls nationwide eventually could go out of business.
According to Coresight Research forecasts, 25% of shopping malls in the United States will disappear in the next three to five years.
"If we can't stop the bleeding, that could rise to as many as 50%. That ends up changing the face of America," Coresight CEO Deborah Weinswig told USA TODAY last year.