Simon Property Group’s investment in retail continues to struggle, as another venture falters. The real estate investment trust (REIT) made a $100 million investment into Saks Global in late 2024, hoping to strengthen the luxury department store’s position as it worked to acquire Neiman Marcus Group. This $2.7 billion deal was finalized in December 2024. However, after a tumultuous 2025, marked by financial struggles, strained vendor relationships, and market share losses, Saks Global filed for bankruptcy earlier this month.
Despite repeated requests, Simon Property Group did not respond for comment on this development. While CEO David Simon has long acknowledged the volatility of the retail sector, he has also consistently highlighted the benefits of investing in retailers, including the opportunity to maintain rents from the retail tenants.
Legal disputes over unpaid rent
In the wake of Saks Global’s bankruptcy filing, Simon Property Group is seeking the U.S. Bankruptcy Court’s approval to terminate leases for over $7 million in unpaid rent. The company claims to have sent termination letters to Saks Global earlier this month, a week before the bankruptcy filing. However, Saks Global’s attorneys are disputing Simon’s ability to withdraw leases for two stores: a Saks Off 5th location at Woodbury Common Premium Outlets in New York and a Neiman Marcus location at the Stanford Shopping Center in California.
Simon’s troubled retail strategy
For years, Simon Property Group has invested in distressed retailers, often partnering with other companies like rival REIT Brookfield and Authentic Brands Group. These investments, such as those in Aéropostale, Forever 21, and J.C. Penney, were often at low prices since the retailers were exiting bankruptcy. While Simon has framed these acquisitions as efforts to strengthen struggling companies and preserve jobs, critics have often argued that the real motivation was to maintain a flow of rental income.
Over time, however, Simon has adjusted its approach to retail investments. While he once championed the strategy of acquiring distressed retailers, he has become more cautious, recently shrinking or cutting his stakes in Forever 21’s operating company, Eddie Bauer, and Authentic Brands. The company is now focusing on investments with little upfront cost, including a retail portfolio with Catalyst Brands, which owns J.C. Penney and several Authentic Brands assets.
Financial turnaround after losses
In the most recent quarter, Simon Property Group saw a significant turnaround. After experiencing a series of losses, its retail-related investments shifted into the black, with net operating income rising from a loss of $7.6 million the previous year to more than $54 million. This marks a positive shift for Simon’s portfolio, signaling that the company’s more recent retail investments may finally be paying off.
Read Also
Francesca’s to Permanently Close
Get Low Leggings: A Retail Trend
Authentic Brands Group’s New Acquisitions
Future of Simon Property Group’s Retail Strategy
Simon Property Group has faced several challenges in the retail sector, especially with its approach to investing in distressed companies. The company’s move to seek approval to terminate leases with Saks Global highlights the risks associated with investing in struggling retailers. As Simon shifts its focus to lower-risk investments, it remains to be seen how its retail strategy will evolve. The company is likely to continue to adjust its approach to accommodate the changing landscape of retail investments.
