The presence of a Cheesecake Factory in a mall could be used as an indicator of the facility’s financial health, a new report has shown.
Somewhat surprising, the correlation was aired Tuesday in a paper penned by Moody’s Analytics titled ‘Get In Loser! We’re Going Shopping!: Checking in on US Malls,’ released in honor of ‘Mean Girls’ Day on October 3.
The report was personally written by the firm’s director of commercial real estate economics Matt Reidy, and looks at trends that coincide with and help explain the downfall of enclosed malls in recent years.
Once a fixture of American society, the complexes are currently on the downfall, and the presence of certain stores – like a Lululemon or an Apple – can be ‘an unscientific measuring stick for the prospects of one mall over another,’ according to Reidy, who writes the same applies to the chain known for its 38 different cheesecake varieties.
In terms of loan performance – a good measure of financial health – he found that about 93 percent of loans backed by malls boasting the chain are current on their payments, compared to a more meager 72 percent rate sported by those without.
The presence of a Cheesecake Factory in a mall could be used as an indicator of the facility’s financial health, a new report has shown. The chain’s store at the Queens Center Mall in NYC is seen here
‘The causal relationship,’ Reidy explained, ‘is likely the result of strong site selection by the company, rather than the restaurant saving a failing mall.’
Still, the relationship exists, and the restaurant is having a quantifiable impact on mall performance, the data shows – in a decade where the behemoths are in danger of being replaced by websites and tech commerce.
As of today, there are 700 enclosed malls spread across the country – down from the more than 2,500 seen in the 80s – and 200 of them sport a Cheesecake Factory.
Looking at the percentage of loans within a financial institution’s loan portfolio whose payments are delinquent, Reidy’s study found that malls without the chain have a non-current rate that is four times higher.
‘Regardless of whether it is strong site selection by the company or, less likely, the restaurant having an impact on mall performance,’ he wrote, ‘the relationship is certainly there.’
The correlation is one of several looked at Reidy’s analysis of the hundreds of shuttered enclosed malls over the past 20 years – a phenomenon that began around Mean Girls’ 2004 release – and the struggles of those that remain.
Within the commercial mortgage-backed securities market, Reidy found, enclosed malls are experiencing non-current rates more than three times that of outdoor outlets, and more than ten times that of centers on towns’ main streets.
The statistic shows the transition from department stores to e-commerce, and changes in shopper preferences – like today’s shoppers preferring to walk directly into a store rather than navigate a maze of storefronts found in a mall.
In response to this decline, mall owners have elected to introduce add-ons like movie theaters and more restaurants – as well as more demonstrated chains like Apple and Lululemon.
In his report, Reidy noted that while Cheesecake Factory – which is mostly confined to American malls – is less frequently mentioned than its counterparts, it ‘could also be a useful indicator of a stronger mall location’.
Since opening as a bakery in the late 70s, the chain’s popularity burgeoned in popularity the late 2000s and early 2010s, around the time malls seen in movies like Mean Girls began their decline.
Reidy’s report shows how since then, the chain has managed to carve out a market in the waning median, with nearly all of its stores opened over the past 20 years being set in enclosed facilities.
In a final parting thought aired by the study, Reidy revealed how the mall featured in the Lindsay Lohan-led movie, Westfield Old Orchard outside of Chicago, does have a Cheesecake Factory.
A chain restaurant known for its 38 different cheesecake varieties, Cheesecake Factory has more than 200 locations across the US, with most of them set in enclosed malls
Still open amid the recent onslaught of closures, it also has a movie theater and a large variety of restaurants, aside from the desert destination.
On a more serious note – regarding the future fate of malls as an institution – Reidy wrote: ‘While we took a rather light-hearted approach in this article, the topic remains extremely serious.
‘There is still a long way to go in the unwind of dying enclosed malls. Experienced and well-capitalized mall operators that continue to adapt and embrace new trends and business strategies are better prepared to weather the storm.
‘Those that do not, or cannot,’ he warned, ‘are likely to find themselves on deadmalls.com.’
DailyMail.com has reached out to Cheesecake Factory for comment. While not issuing a statement, the firm’s social media seemed to take notice of the Moody’s study on Tuesday – while marking the Mean Girls holiday with a tasteful meme.
Showing the moment Rachel McAdams’ Regina George uttered the lines contained in the study’s the title, the post’s accompany caption in turn offered another homage, reading simply: ‘Cheesecake? So fetch.’
Source: | This article originally belongs to Dailymail.co.uk
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