Dillard’s Bucks Retail Trend With Purchase of East Texas Mall

While Macy’s and JCPenney race to cash out of their real estate, Dillard’s is doubling down on brick and mortar, recently buying an entire mall.

The Little Rock-based retailer paid $34 million this month for Longview Mall in East Texas, teaming with partner Trademark Property to acquire the 47-year-old shopping center from Washington Prime Group, the Wall Street Journal reported. The buy marks a rare move for a department-store chain at a time when most are selling off property to raise cash. Plano-based JCPenney recently is selling 119 stores to Onyx Partners for $947 million, for example.

The Longview deal wasn’t just about expansion. The company wanted to keep the asset out of the hands of “bad actors” in the mall business, said Chris Johnson, co-chief financial officer for Dillard’s.

Prolific buyers like Kohan Retail and Namdar Realty have faced lawsuits and criticism for letting malls deteriorate while collecting rent.

The acquisition is a throwback to an era when department stores routinely co-owned malls they anchored, a practice that began as malls were built out in the 1960s then largely ended by the early 1990s. One industry veteran told the outlet that it’s been decades since a major department-store chain held that kind of stake. The few exceptions in recent years have come from big-box players: Walmart bought Monroeville Mall near Pittsburgh earlier this year, while Home Depot scooped up a Virginia mall in 2022.

For Dillard’s, the purchase underscores its unusual position in a struggling sector. Unlike peers shedding stores and properties, the chain owns most of its 272 locations and has a balance sheet strong enough to go shopping with, clocking in with more than $1 billion in cash on-hand in the second quarter. That cushion gave CEO Bill Dillard room to secure a longtime favorite asset and, perhaps, a local loyalty play.

Longview Mall was among a handful of enclosed malls that Simon spinoff Washington Prime Group held onto through bankruptcy as strong performers. Dillard’s has been credited with keeping the property relevant. Trademark Property, which will lease and manage the mall on Dillard’s behalf, is starting with basic fixes such as lighting, refreshed entrances and upgraded seating with an eye toward boosting leasing and sales.

— Eric Weilbacher