Retailers

Sears is Dead Meat Walking, after Horrid Holiday Quarter

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– Sears is Dead Meat Walking, after Horrid Holiday Quarter:

Why is Sears’ CEO still touting “progress,” even in SEC filings? Why not tell investors the truth, for once?

Sears Holdings — the storied and once dominant retailer turned into the biggest tragedy in US retail history — reported fourth quarter earnings today. The quarter, ended February 3, covered the crucial holiday sales period. Revenues plunged 27.7% year-over-year to 4.4 billion.

Over the same period, total retail sales across the US by all retailers, including online, rose 5.2%.

In fact, Sears’ revenues were so bad that in the crucial holiday quarter they were about flat with Q1 and Q2. In other words, Q4 was an unmitigated fiasco-disaster quarter.

In Q4 2012, Sears still had $12.3 billion in revenues.

The chart below shows just how miserably terrible revenues were in Q4, with no holiday pickup whatsoever, likely the first quarter in Sears’ post-World War II history where holiday revenues were about flat with Q1 and Q2 of the same year:

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H/t reader eric:

`Recovery’

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Thousands More Stores Are Now On The 2018 Retail Apocalypse Death List

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– Thousands More Stores Are Now On The 2018 Retail Apocalypse Death List:

Every year, it seems like more and more retail outlets are going out of business, resulting in the loss of jobs and local supplies. Last year, hundreds of stores closed, and this year, even more shops are scheduled to shut their doors for good.

The 2018 Death List

This year, in an effort to save their businesses, the following retailers will close hundreds of their stores, according to Fox Business.

The Brick & Mortar Retail Meltdown, February Update

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– The Brick & Mortar Retail Meltdown, February Update:

And private equity is all over it.

The brick-and-mortar retail meltdown – despite protestations to the contrary – continues with a mechanistic air of inevitability. This started in 2015, took off in 2016, and picked up pace and magnitude in 2017, a progression I documented along the way. Now in 2018, there has been a brutal January and here’s the even more brutal February.

Bon-Ton Stores filed for Chapter 11 bankruptcy on February 4. The filing by the regional department store chain based in Pennsylvania was the largest bankruptcy filing by a retailer in 2018. It had been discussing with its creditors a restructuring of its debts, but that had turned out to be fruitless.

Read moreThe Brick & Mortar Retail Meltdown, February Update

Online Retail Soars at Fastest Rate in Years

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H/t reader squodgy:

“Internet retail sales are expanding, but it is still only 10% of the total market, so cannot be blamed for the decline of the Mall & High Street.”

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The Brick-and-Mortar-Retail Meltdown in January

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– The Brick-and-Mortar-Retail Meltdown in January:

‘Tis the season for bankruptcies.

Sears Holdings, which has been on a highly effective hedge-fund-manager-designed program of cost-cutting itself to death, announced today that it obtained another $100-million loan from JPP, LLC and JPP II, LLC, which are solely owned by said hedge-fund manager and CEO of Sears Holdings, Eddy Lampert. After prior loans by the same entities and by Lampert’s hedge fund ESL were secured by the part of real estate that hadn’t been sold off in sweetheart deals to affiliated parties, the new loan is secured “by certain real property interests” and by “substantially all of the unencumbered intellectual property of the Company and its subsidiaries” except the IP related the Kenmore and DieHard brands.

Stripping out while the stripping is still possible.

Yesterday, Sears announced another step in cost-cutting itself to death: axing 220 jobs mostly at its corporate office. This was part of its stated goal to trim $1.25 billion from its annual expenses. After closing hundreds of Sears and Kmart stores last year, the company is on track to close 63 more stores in January. This will leave it with 1,041 Sears stores, down from 3,555 in 2010, and with about 500 Kmart stores.

Read moreThe Brick-and-Mortar-Retail Meltdown in January

We Have Tripled The Number Of Store Closings From Last Year, And 20 Major Retailers Have Closed At Least 50 Stores In 2017

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– We Have Tripled The Number Of Store Closings From Last Year, And 20 Major Retailers Have Closed At Least 50 Stores In 2017:

Did you know that the number of retail store closings in 2017 has already tripled the number from all of 2016?  Last year, a total of 2,056 store locations were closed down, but this year more than 6,700 stores have been shut down so far.  That absolutely shatters the all-time record for store closings in a single year, and yet nobody seems that concerned about it.  In 2008, an all-time record 6,163 retail stores were shuttered, and we have already surpassed that mark by a very wide margin.  We are facing an unprecedented retail apocalypse, and as you will see below, the number of retail store closings is actually supposed to be much higher next year.

Whenever the mainstream media reports on the retail apocalypse, they always try to put a positive spin on the story by blaming the growth of Amazon and other online retailers.  And without a doubt that has had an impact, but at this point online shopping still accounts for less than 10 percent of total U.S. retail sales.

Read moreWe Have Tripled The Number Of Store Closings From Last Year, And 20 Major Retailers Have Closed At Least 50 Stores In 2017

Blame the US Retail Apocalypse on hedge funds and financialization, not Amazon and Walmart

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– Blame the US Retail Apocalypse on hedge funds and financialization, not Amazon and Walmart:

America is in the midst of a “retail apocalypse”: 6,800 chain stores are closing this year. It’s true that online retailers and winner-take-alls like Walmart have delivered the coup de grace that finished off these stores, but the conditions that made them weak enough to kill are driven by Wall Street, not Walmart.

The common factor shared by the disparate struggling and bankrupt retailers — Toys R Us, Claire’s, Nordstrom’s, Macy’s, Sears, Penney’s, Circuit City, Sports Authority, Payless, Radio Shack, etc — is that they are saddled with crushing, inescapable debt that they took on when they were acquired by hedge funds that loaded the debt on as a way of stripmining the companies; also, they increasingly rely on predatory store-cards that can be used as cover for more financialization, debt-loading, and extraction by investors who profit even (especially) when their investments go bust.

Read moreBlame the US Retail Apocalypse on hedge funds and financialization, not Amazon and Walmart

Why America’s Retail Apocalypse Could Accelerate Even More In 2018

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– Why America’s Retail Apocalypse Could Accelerate Even More In 2018:

Is the retail apocalypse in the United States about to go to a whole new level?  That is a frightening thing to consider, because the truth is that things are already quite bad.  We have already shattered the all-time record for store closings in a single year and we still have the rest of November and December to go.  Unfortunately, it truly does appear that things will get even worse in 2018, because a tremendous amount of high-yield retail debt is coming due next year.  In fact, Bloomberg is reporting that the amount of high-yield retail debt that will mature next year is approximately 19 times larger than the amount that matured this year…

Read moreWhy America’s Retail Apocalypse Could Accelerate Even More In 2018

Malls and their Hapless Investors Keep Getting Crushed

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– Malls and their Hapless Investors Keep Getting Crushed:

(Creative) Destruction in the brick-and-mortar meltdown.

Investors in retail malls didn’t need another wake-up call. They’ve been wide awake all year, hearing from Wall Street that there’s no brick-and-mortar meltdown even as the shares of their real estate investment trusts (REITs) have gotten crushed by the travails of brick-and-mortar retail and the over-malling of America. But late Thursday, mall investors got another unneeded wake-up call.

CBL Properties, a mall REIT with 119 mostly retail-oriented properties, reported earnings, and shares plunged 26% on Friday, to $5.92. They’d already been dropping for years because the brick-and-mortar retail meltdown is structural, and not new, and will not turn around before it’s finished melting down. Shares of CBL are down 50% year-to-date and 75% from May 2013.

Read moreMalls and their Hapless Investors Keep Getting Crushed

Retailers on edge as sales dive at fastest pace since the financial crisis

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– Retailers on edge as sales dive at fastest pace since the financial crisis:

More retailers reported falling sales this month than at any point since March 2009 as British shoppers cut back on spending in food shops, department stores and furnishing specialists.

Prices are rising faster than wages, squeezing the finances of many households and denting their ability to buy more in the shops.

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H/t reader Squodgy:

“I wonder what’s going on to cause this?????? Erm….”

British shoppers already have everything (that they are told) they need to have or is it shopping fatigue, which needs to be treated with Ablify?

Can’t think of any other reasons. Haha.

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Energy retailers cut off thousands due to unpaid bills, report shows

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– Energy retailers cut off thousands due to unpaid bills, report shows:

POWER firms threw the switch on almost 13,000 struggling Victorians in the first three months of this year.

The 12,718 residential customers cut off for not paying their gas and electricity bills were 2000 more than were cut off in the previous quarter.

And since last July, firms flouting proper procedure wrongly disconnected at least 520 customers — including six who needed power for life-supporting equipment such as respirators and dialysis machines.

Read moreEnergy retailers cut off thousands due to unpaid bills, report shows

What the Headlines Got Wrong about Retail Sales

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– What the Headlines Got Wrong about Retail Sales:

No, our American consumers didn’t suddenly perform a  miracle.

As part of the data dump on Friday, the Commerce Department released its estimates for retail sales for September. If you just looked at the headlines, you’d get the impression that our American consumers suddenly had gone out to splurge, fired up by two powerful, destructive, and deadly hurricanes:

Read moreWhat the Headlines Got Wrong about Retail Sales

Brick & Mortar Meltdown: Toys R Us Hires Bankruptcy Law Firm

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– Brick & Mortar Meltdown: Toys R Us Hires Bankruptcy Law Firm: 

Brick-and-mortar retail meltdown strikes again – this time, Toys R Us. In what is a classic sign, the company has hired mega law firm Kirkland & Ellis, whose bankruptcy-and-restructuring practice is considered a leader in the now booming bankruptcy-and-restructuring industry.

Toys R Us, with 1,694 stores globally, has $5.2 billion in long-term debt, according to its latest quarterly report, and sports a negative equity of $1.3 billion. Quarterly sales declined 4.8% year-over-year, to $2.2 billion. This isn’t a one-quarter dip: sales are down 15% from the same quarter in 2012. And the net loss jumped 30% year-over-year to $164 million.

The company needs to restructure its debts, particularly $400 million that is coming due in 2018, and a bankruptcy filing is one of the options, “sources familiar with the situation” told CNBC on Wednesday.

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H/t reader squodgy:

“Should have moved to online years ago.”

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Retail Bloodbath After Target Announces Price Cuts On “Thousands Of Items”

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– Retail Bloodbath After Target Announces Price Cuts On “Thousands Of Items”:

Amazon may have the most razor thin margins in the entire retail world, but that doesn’t mean that its peers can’t catch up as the global race to the deflationary bottom enters its final stage.

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The System Continues To Fall Apart As The Economic Apocalypse Takes Hold (Video)

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https://youtu.be/JrTfu5jDLA0

H/t reader squodgy:

“This sums up the current position.
Funny how the term ‘delinquency’ doesn’t just refer to teenagers!
It also refers to businesses not performing as the banksters expect.”

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The Amazon Effect: Retail Bankruptcies Surge 110% In First Half Of The Year

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– The Amazon Effect: Retail Bankruptcies Surge 110% In First Half Of The Year:

As Amazon flirts with a $500 billion market cap, letting Jeff Bezos try on the title of world’s richest man on for size if only for a few hours, for Amazon’s competitors it’s “everything must go” day everyday, as the bad news in the retail sector continue to pile up with the latest Fitch report that the default rate for distressed retailers spiked again in July.

According to the rating agency, the trailing 12-month high-yield default rate among U.S. retailers rose to 2.9% in mid-July from 1.8% at the end of June, after J. Crew completed a $566 million distressed-debt exchange. Meanwhile, with the shale sector flooded with Wall Street’s easy money, the overall high-yield default rate tumbled to 1.9% in the same period from 2.2% at the end of June as $4.7 billion of defaulted debt – mostly in the energy sector – rolled out of the default universe.

Read moreThe Amazon Effect: Retail Bankruptcies Surge 110% In First Half Of The Year

It’s Official: Sears Canada Announces Bankruptcy; Fires 2,900

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– Sears Canada Announces Bankruptcy; Fires 2,900:

It’s official – the US ‘retail apocalypse’ has moved north as Sears Canada (and some of its subsidiaries) have applied to Ontario Superior Court of Justice for protection under the companies’ Creditors Arrangement Act (CCAA), in order to continue to restructure its business.

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2017 Is Going To Be The Worst Retail Apocalypse In U.S. History – More Than 300 Retailers Have Already Filed For Bankruptcy

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– 2017 Is Going To Be The Worst Retail Apocalypse In U.S. History – More Than 300 Retailers Have Already Filed For Bankruptcy:

Not even during the worst parts of the last recession did things ever get this bad for the U.S. retail industry.  As you will see in this article, more than 300 retailers have already filed for bankruptcy in 2017, and it is being projected that a staggering 8,640 stores will close in America by the end of this calendar year.  That would shatter the old record by more than 20 percent.  Sadly, our ongoing retail apocalypse appears to only be in the early chapters.  One report recently estimated that up to 25 percent of all shopping malls in the country could shut down by 2022 due to the current woes of the retail industry.  And if the new financial crisis that is already hitting Europe starts spreading over here, the numbers that I just shared with you could ultimately turn out to be a whole lot worse.

I knew that a lot of retailers were filing for bankruptcy, but I had no idea that the grand total for this year was already in the hundreds.  According to CNN, the number of retail bankruptcies is now up 31 percent compared to the same time period last year…

Read more2017 Is Going To Be The Worst Retail Apocalypse In U.S. History – More Than 300 Retailers Have Already Filed For Bankruptcy