Big Short Against Malls Is Still on Back Order

A little more than a year ago, a relatively small hedge fund, Alder Hill, went public with its relatively big bet -- reportedly half of its $200 million fund -- against retailers and malls. It was dubbed the new Big Short -- a reference to the bet against housing in the run-up to the financial crisis that netted a few hedge funds tens of billions of dollars. A few other hedge funds came out and said that they, too, were short the CMBX 6, an index of subprime commercial real estate debt that has about the most significant mall exposure that you can find, and a few Wall Street analysts recommended the same. Some quickly declared the trade too crowded.

How's the bet playing out? Based on the news, you would think exceptionally well. Last week, Toys "R" Us Inc., already bankrupt, said it was closing all of its stores. Mall jewelry chain Claire's Stores Inc. filed for bankruptcy on Monday. Department chain Bon-Ton Stores Inc. decided to close more locations than expected. And while not exactly mall news, though indicative of Amazon. com Inc.'s march through retail, Southeastern Grocers LLC, the owner of Winn-Dixie, filed for bankruptcy on Thursday, the second of two supermarket chains to do so in less than a month. And that was just in the past week.