January 5, 2018

Closure of Sears anchor store adds to Bangor Mall’s troubles

Sears Holdings, parent company of Sears and Kmart stores, told its employees Thursday that it will be closing more than 100 additional stores this year. The Sears store at the Bangor Mall is the only Maine store on the list of 64 Kmart and 39 Sears stores slated for closure.

In its announcement, Sears Holdings stated the closings will occur between early March and early April, and that liquidation sales could begin as early as Jan. 12.

"Sears Holdings continues its strategic assessment of the productivity of our Kmart and Sears store base and will continue to right size our store footprint in number and size," the company stated. "In the process, as previously announced we will continue to close some unprofitable stores as we transform our business model so that our physical store footprint and our digital capabilities match the needs and preferences of our members."

In an earlier round of 150 unprofitable store closures announced last January, Sears Holdings announced it would close its Kmart location in Bangor and a Sears store in Augusta.

Thursday's closure announcement means the Bangor Mall is losing another anchor tenant. Last January the mall's Macy's store closed, leaving a 143,000-square-foot space on two floors. With the Sears store soon to be closed, that leaves a J.C. Penney and Dick's Sporting Goods as the remaining anchors.

In December, the Bangor Daily News reported that an appraisal conducted by LNR Partners of Miami Beach, Fla., a loan servicer that specializes in troubled debt, valued the Bangor Mall at $28.9 million. That's down 77% from the mall's $128 million value in 2007, when its primary owner, Simon Property Group of Indianapolis, took out an $80 million loan, using 536,299 square feet of the mall as collateral. Simon defaulted on the loan in October, the BDN reported.

Simon Property Group (NYSE: SPG), which is based in Indianapolis, is the nation's largest owner of regional malls. In Maine, in addition to the Bangor Mall, it owns Kittery Premium Outlets. In Newington, N.H., outside Portsmouth, it owns the Mall at Fox Run.

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