Landlords need to take an active role as troubled retailers face bankruptcy.
The old playbook of waiting to address leases in bankruptcy is over. In today’s environment, where chainwide liquidation is becoming an increasingly common outcome, landlords cannot afford to be passive. It is crucial to proactively engage with tenants, understand their financial health, and be prepared to negotiate and adapt lease terms to help them avoid bankruptcy court.
Consider what has happened in American retailing since the pandemic. While some sectors thrived during the initial COVID-19 lockdowns and the subsequent release of pent-up demand, a troubling number of companies experienced a transient spike in sales fueled by government stimulus, only to see those gains evaporate. This left them in a precarious position in which they were unable to find their footing in the changed economic landscape.
Conn’s, known for its Conn’s Home Plus banner, is one example. This publicly traded retailer saw an initial boost as temporarily cash-flush consumers invested in home goods and electronics. Sales soared but then began declining in the fourth quarter of 2022.
Management remained optimistic about a recovery of those prior volumes. However, as the stimulus faded and the broader economic environment began to be characterized by rising interest rates and persistent inflation, that hoped-for spending never returned.
For the fiscal year ending January 31, 2023, Conn’s same-store sales declined by 20.5 percent, with a 21.8 percent decrease for Q4 of that year.
This disappointing trend continued into 2024. Burdened by debt and unable to recapture its pandemic-era momentum, Conn’s eventually succumbed to the pressures, filing for bankruptcy in July 2024 and signaling its ultimate liquidation.
Turnaround Strategies
Conn’s story exemplifies the worrying trend toward liquidations over traditional reorganizations and continuation of a core business. The shopping center industry has seen a growing list of once familiar names choose to cease their retail operations entirely, in some cases after long struggles for survival, including a prior bankruptcy that led to a prior reorganization. The list includes Joann Fabrics, Forever 21, Big Lots, Rue 21, Bargain Hunt, Party City, and Rite Aid.
As landlords and tenants navigate this evolving and challenging landscape, they both stand to benefit by adjusting their strategies.
Some might argue that today’s economic pressures are simply “culling the herd” by revealing precisely which retail business models have run their course. The thinking goes that piling merchandise to the rafters, as was the approach for so many junior-box retailers that have disappeared over the years, is a losing bet in the digital era. Similarly, older casual-dining concepts can seem stale at a time when the likes of fast-paced Dutch Bros Coffee and Dave’s Hot Chicken are on a tear.
These concerns are legitimate, but with landlord cooperation and the right strategic approach, it is possible for tenants to pull off successful turnarounds. The key is an early intervention in which troubled operators make strategic adjustments out-of-court. Mere cost-cutting is not enough. It takes a holistic and realistic reexamination of the retailer’s brand, promotions, back-of-house operations, customer experience, inventory dynamics and store and non-store real estate. It is also critical to act decisively soon enough that the retailer still has sufficient capital and stakeholder goodwill to be able to make necessary changes.
To understand how such holistic approaches can play out, consider some of the operators that are thriving even though they belong to categories in which many of their competitors are struggling or have gone under.
Dick’s Sporting Goods continues to score points with consumers. In fiscal 2024, Dick’s posted comp-store sales growth of 5.2 percent, opening seven House of Sport and 15 Field House locations. The management team has successfully executed its strategy of making Dick’s more fun and experience oriented.
Chili’s same-store sales surged 31.4 percent in fiscal 2024 and 31.6 percent in Q3 2025, with a more than 21 percent year-over-year increase in traffic that same quarter. While Chili’s is the kind of old-school, casual-dining operator that, according to some observers, ought to be falling behind, it has absolutely nailed its value-oriented promotions of new appetizers, drinks and meals. It has even become trendy on social media.
Under CEO James Daunt, privately held Barnes & Noble Booksellers has captivated consumers and landlords alike using a localized, indie-inspired approach. Formerly troubled, the retailer now reportedly plans to open more than 60 new stores this year and to grow to as many as 1,000 locations over the next few years.
Strategy and Execution Matter More Than Ever
These examples highlight the potential for smart strategy and great execution to translate into a vibrant, go-forward business. However, companies must walk a tightrope to be competitive in today’s more demanding marketplace. When people can afford to eat out just once a month, they will look for a place that is on trend and that offers both value and a nice experience. Instead of ordering cheap apparel willy-nilly online, discerning consumers will favor stores that they truly enjoy shopping and where they can buy clothing that fits well, looks good and will last.
This “strategy and execution gap” helps explain why we are seeing such a barbell effect, with some operators thriving even as others in their category falter.
With uncertainty around the direction of employment, still-high interest rates and growing concerns about the effects of tariffs and a recession in the second half of the year, troubled tenants are at greater risk of going under. Landlords would do well to encourage challenged operators to collaborate with a multidisciplinary team of advisors focused on reinvigoration. Weak operators, and dark spaces, benefit no one.
Altering strategy and enhancing execution are not inexpensive to do well, and finding efficiencies is necessary. In addition to weighing options for refinancing or bringing in additional capital, the team should make real estate a major part of the discussion. Occupancy costs and store and non-store locations such as offices, showrooms and distribution centers need to be brought into alignment with the company’s financial realities and go-forward strategy.
The right approach can give valued tenants enough runway to regain their competitiveness, bolster traffic and sales — and keep paying rent and renewing leases over the long term.
Doug Greenspan, a senior managing director at A&G Real Estate Partners, provides strategic consulting for both healthy and distressed companies across all sectors as they seek to navigate today’s complex real estate challenges. He can be reached at doug@agrep.com
This article was originally published in the October 2025 issue of Shopping Center Business magazine.