Friday, June 28, 2019

How Pier 1, Rite Aid and other distressed retailers stacked up in Q1

Retail Dive
In a May report, analysts with Moody's described an emerging Darwinian landscape for the industry, where the largest retailers with the healthiest balance sheets take advantage of everybody else's debt woes, underinvestment and execution missteps. The analysts called it a "survival of the fittest" in retail, which could lead to further consolidation of the industry (meaning there could be more big retail liquidations to come).

To some extent, the industry saw that play out in the first quarter of 2019. Walmart, Target, Amazon and Costco have reported relatively booming sales, growth online and sizable profits. But the quarter was tough for many that are trying to find their footing and pay off interest expenses. . . . more

How Should Retail Leases Account for Omni-Channel Transactions?

NREI
Retail landlords need to adapt to tenants increasingly employing omni-channel sales formats, according to industry insiders.

“Many times, [landlords] have a clause in the lease that requires tenants to report sales, just as a way for the landlord to track the health of the tenant,” says Scott Holmes, senior vice president and national director of the national retail group with brokerage firm Marcus & Millichap. “That gives the landlord some degree of leverage in leases that are due for renegotiation if they know that the tenant is doing great in that location. So, landlords for quite some time have been concerned about how do they track all sources of sales being generated by the trade area surrounding a store, especially as more and more sales are happening online?”. . . more

Can Taking Hudson’s Bay Private Save the Ailing Retail Company?

NREI
Struggling Canadian department store chain Hudson's Bay Co., owner of Saks Fifth Avenue and Lord & Taylor, might be going private.

A group of Hudson’s Bay shareholders, spearheaded by Executive Chairman Richard Baker, has offered a cash bid valued at $1.74 billion Canadian dollars (or roughly US $1.31 billion) to take the company private.. . . more

Study examines wider impact of Amazon Prime Day

Chain Store Age
Online consumers change their behavior for what has become “Black Friday in July.”

Digital marketing platform Bazaarvoice has conducted a study of 1,000 U.S. consumers and more than 6,000 retail sites (including top U.S. retailers) that are part of its network. With numerous other retailers now offering July online sales events to compete with Amazon Prime Day, Bazaarvoice saw a 21% increase in visitor traffic during Prime Day 2018 in comparison to typical traffic. Additionally, the number of shoppers increased by 15%, and the number of orders increased by 11%.. . . more

Chico’s gives same answer to new Sycamore bid

Chain Store Age
Chico’s FAS is saying no to a lower version of a buyout offer made in May.

The Chico’s board of directors has unanimously rejected an unsolicited proposal received from Sycamore Partners on June 19, 2019 to acquire all of the outstanding shares of the company for $3.00 per share in cash. The $350 million offer follows rejected offers Sycamore previously made to acquire Chico’s for $3.50 a share and $4.30 a share.. . . more

Vision benefits giant makes a power play in physical store strategy

Chain Store Age
As the lines between health care and retail continue to blur, VSP’s newest deal is poised to give the company a strong foothold in the retail marketplace.

VSP Global, whose businesses include national vision benefits company VSP Vision Care, on Thursday announced that it will acquire San Antonio, Texas-based VisionWorks — the sixth largest optical chain in the United States. In addition to acquiring VisionWorks’ portfolio of more than 700 stores in nearly 40 states, the deal will be the single largest VSP network investment in the company’s 65-year history. . . . more

Rent the Runway, Nordstrom team up to boost convenience, attract customers

Reuters
Nordstrom Inc and Rent the Runway announced a partnership on Thursday that aims to draw more foot traffic into the department store while making the clothing rental service more convenient so it can improve service to existing customers and attract new ones.

Rent the Runway “drop-off boxes,” where subscribers can quickly scan and return rented items, will be placed inside four Los Angeles-based Nordstrom stores, three of which are smaller “Nordstrom Local” stores billed by the chain as “a convenient drop-in hub” closer to residential areas.. . . more

Thursday, June 27, 2019

Target going back to school — in-store and online

Chain Store Age
Target is ramping up its school credits as it gears up for back-to-school shopping.

The discounter is opening a college section, launching an exclusive lifestyle brand for tween girls and expanding its popular Cat & Jack kids line.

Target said it will open in-store shops stocked with essentials for college living in more than 700 Target locations. The shops will feature items for bedroom, bathroom, kitchen and more. . . . more

Walgreens retail falters on lower tobacco sales

Retail Dive
Walgreens Boots Alliance on Thursday reported that third quarter sales rose 0.7% (2.9% in constant currency) to $34.6 billion, thanks mostly to its U.S. pharmacy and wholesale pharmacy operations. Retail sales in the quarter fell 2.9% year over year, reflecting store closures after the acquisition of Rite Aid stores, according to a company press release.

Comparable retail sales fell 1.1% in the quarter, primarily due to a de-emphasis of tobacco, the drugstore retailer said.. . . more

Gen Z shoppers big on brick-and-mortar — and BOPIS

Chain Store Age
Young shoppers like shopping in stores.

That’s according to a new study by Package Concierge, in which nearly 60% of surveyed shoppers aged 18 to 25 years old said they visited a mall within the last week, with almost 90% making an in-store purchase during their visit. Nearly one-third of those polled said they want items purchased within just a few hours, typically quicker than they can get them via online shopping.. . . more

Pier 1 Imports’ Q1 loss widens; ups store closures

Chain Store Age
Pier 1 Imports continued to bleed in the first quarter as its loss nearly tripled and its sales continued to slide.
Pier 1 ended the quarter with 967 stores, down 30 from the year-ago period. The retailer said it is looking to close some 57 locations in its current fiscal year, higher than the chain’s previous estimate of 45, which it gave back in April. . . . more

Amazon ramps up delivery wars in deal with Rite Aid

Chain Store Age
Amazon is launching its own version of buy-online-pickup-in stores.

The online giant is partnering with Rite Aid to launch “Counter,” dedicated counters in Rite Aid stores where Amazon customers can pick up their purchases. The service, which is free to all Amazon customers, is now available in more than 100 Rite Aid stores, and will be rolled out across 1,500 locations by the end of the year. Financial terms of the arrangement weren’t disclosed.. . . more

Can Kroger Catch Walmart in Online Grocery Sales?

Yahoo Finance
Walmart surpassed Amazon.com last year as the favorite destination for online grocery shoppers. Having added so many options for buying and getting groceries -- including a recently rolled out direct delivery-to-refrigerator service -- the retail giant zipped passed its e-commerce rival with 33% of online shoppers choosing Walmart, versus 31% for Amazon.

Yet in terms of actual dollar sales, Amazon is still the king, selling $8.2 billion worth of groceries online in 2018, a 12.5% increase over the year before, according to data from Edge by Ascential. Walmart was a distant second with just $2.8 billion of groceries sold, up 10% year over year. . . . more

It's time for Boston's Time Out Market. Here's a sneak peek inside

Boston Business Journal
A spicy crispy chicken sandwich cooled by nori buttermilk ranch dressing from Ms. Clucks Deluxe. Tony Maws' famous Craigie Burger alongside some of Michael Schlow's tagliatelle bolognese. A warm lobster roll from Saltie Girl, and a zippy coffee sangria from George Howell Coffee.

Those are some offerings of the new Time Out Market in Boston's Fenway neighborhood. Today, Boston becomes the fourth city in the world to host a Time Out Market. The market debuted in Lisbon, Portugal in 2014 and has last month opened in New York and Miami.. . . more

Wednesday, June 26, 2019

Neiman Marcus goes 'dark'

Retail Dive
Neiman Marcus will stop filing public statements with the Securities and Exchange Commission, according to a Form 15 document filed June 21 with the federal agency. The department store’s debt holders number "less than 50," according to the filing.

The department store, which two years ago abandoned an effort to go public, is able to "go dark" because its reporting requirements were tied to its debt, which was renegotiated earlier this year. Neiman Marcus didn’t immediately respond to Retail Dive’s request for comment on the move.. . . more

Out with the Old: Embracing the Value of Evolved Retail Centers

NREI
Store closures are an all too common occurrence nowadays, with announcements hitting the news cycle on a semi-weekly basis. Mass closings by household names like Victoria’s Secret, Gap, and J.C. Penney have raised concerns amongst developers that traditional retail centers are in danger of extinction as e-commerce gains steam. Fortunately, the outlook isn’t nearly this pessimistic. In fact, these empty boxes unlock potential for new e-commerce concepts and alternate uses and could be leading us towards a whole new era of bricks-and-mortar retail.

Shopping centers with compelling assets relevant to consumers will attract investors this year, according to Nuveen’s 2019 Real Estate Outlook, especially properties like destination malls with experiential offerings. . . . more

How Apollo Salvaged a Grocery Buyout Gone Horribly Wrong

NREI
Deutsche Bank AG and its co-lenders were staring at tens of millions of dollars in potential losses.

The banks -- a who’s who of Wall Street’s top underwriters -- had promised to arrange loans to fund Apollo Global Management LLC’s buyout of discount grocer Smart & Final Stores Inc., which the private-equity firm planned to split in two.

But worried about razor-thin margins and intense competition in the industry, many investors had shown little appetite in recent weeks for the riskiest part of the deal -- a $380 million tranche tied to the company’s retail side. . . . . more

7-Eleven takes delivery convenience to new heights

Chain Store Age
A new on-demand delivery feature from 7-Eleven brings products to a variety of public locations.

7-Eleven is offering 7Now Pins, on-demand delivery technology that allows users to order products to locales such parks, beaches, sports fields, and entertainment venues. The proprietary hot spot technology was developed in house by the 7-Eleven digital team and has added more than 2,000 7Now Pins, or hot spots, to the 7Now delivery app.. . . more

Shoppers set to spend more than ever on Prime Day

Chain Store Age
Amazon Prime Day 2019 is looking to be the most lucrative shopping event yet — and not just for Amazon.

That’s according to a new study of U.S. and U.K. Prime members from Profitero, which revealed that the annual shopping extravaganza is gaining more steam with each passing year. Seventy-six percent of Prime members in the U.S. are planning to shop on Prime Day this year, up from 63% last year.. . . more

Consumer confidence drops more than expected, reaching its lowest point in nearly two years

CNBC
A key measure of the American economy slipped this month after three consecutive months of increases as consumers saw the trade war with China as an increased risk.

The Conference Board’s consumer confidence index declined to 121.5 in June, the business research group said on Tuesday. The drop was more than the decline to 131.1 that economists surveyed by Reuters expected. . . . more

Target's Deal Day challenges Amazon's Prime event

engadget
Target is going head to head with Amazon's Prime Day this year by debuting an event call "Deal Days"-- and yes, it'll also last for 48 hours. In a bid to compete with Amazon for your hard-earned dollars, the retailer is also holding an online sale event from July 15th to 16th. Target even stressed in its announcement that there's "no membership required" to participate. Unlike Prime Day, it means, which is limited to Prime subscribers who have to pay a year-long membership fee that costs $119 in the US unless they're still on free trial.. . . more

Tuesday, June 25, 2019

Private Equity Retail ‘Abuses’ Spur Senator to Plan Legislation

NREI
Wisconsin Senator Tammy Baldwin is adding her voice to a growing list of politicians admonishing private equity’s stewardship of debt-laden retailers. And she says she is trying to do something about it.

“There are definitely active discussions” toward legislation that would address the collapse of struggling companies tied to buyout firms, Baldwin said in an interview Thursday following the release of a letter chiding Sun Capital Partners Inc. for its management of bankrupt retailer Shopko Stores Inc. “Legislation will be designed so this doesn’t happen again.” . . . more

Can a new owner re-write the story of Barnes & Noble?

Retail Dive
If the life of Barnes & Noble were a book, this is the part where the calvary comes riding over the hill or the White Knight charges in, after many pages of tension.

Eight months after officially exploring a sale, Barnes & Noble landed a buyer in June. The $34 billion hedge fund Elliott Management has already picked up a large bookstore chain overseas, Waterstones, and Paul Best, Elliott's portfolio manager and head of European private equity, said when the Barnes & Noble deal was announced that it, "demonstrates our conviction that readers continue to value the experience of a great bookstore." . . . more

Pet Supplies Plus Signs 22 Franchise Agreements in Early 2019, Will Result in 46 New Stores

PR Newswire
Pet Supplies Plus, the largest independent pet retailer known for its 'Minus the hassle,' brick-and-mortar customer experience, welcomed 46 new franchise store deals in the first half of 2019.

The newly signed stores will be developed across Texas, Florida, California, Michigan, Kentucky and New Hampshire.. . . more

Amazon unveils online beauty store for a very select group

CNN Business
America's convenience stores are trying to shake off their reputation as gas stations with hot dogs on rollers and Slurpees inside.

On Monday, 7-Eleven said it would start delivering to "hot spots," including parks, beaches and other public locations through its year-old 7-Now delivery app. 7-Eleven's move, which is similar to Domino's beach delivery launch last year, is the latest sign of convenience chains reshaping their businesses for the digital era.

Chains such as 7-Eleven, Wawa and QuikTrip are sprucing up stores, adding online delivery and offering craft beers and meal kits to woo customers. . . . more

Toys “R” Us reportedly set for small-scale comeback

Chain Store Age
Toys “R” Us is plotting a return to the U.S. retail scene with stores later this year.

Tru Kids Brands, which bought the intellectual property, including the brand names of Toys “R” Us, Babies “R” Us, and Geoffrey the Giraffe following the chain’s bankruptcy filing and liquidation last year, plans to open approximately six stores and an e-commerce site this year, reported Bloomberg. . . . more

Dressbarn announces first store closures, beginning plan to shutter 650 locations by 2020

Fox Business
Dressbarn’s “wind down” of its retail operation is officially beginning at the end of this month.

The retailer announced Friday it will be closing 25 stores across the nation by the end of June and at least three more stores in July. Dressbarn, which listed the stores closing on its website, plans to shutter all 650 retail locations by the first half of 2020.. . . more

Bookstores find growth as ‘anchors of authenticity’

Boston Business Journal
Corporate chains were once a threat to smaller bookstores, but entrepreneurs have found ways to thrive, including hosting events and adding nonbook merchandise like games and T-shirts. The American Booksellers Association, a trade group for independent bookstores, has grown to 1,887 members with 2,524 locations as of May 15, the highest participation since at least 2009, when there were about 1,650 indie bookstores, the group said.

Another challenger to traditional publishing, e-books, has also started to fizzle. Sales of digital books fell 3.6% to $1.02 billion in 2018, a third straight decline, while hardback sales rose 6.9% to $3.06 billion and paperback sales 1.1% to $2.67 billion, according to the Association of American Publishers. . . . more

Friday, June 21, 2019

Walmart Pays $282 Million to End Long-Running Bribe Probes

Yahoo Finance
Walmart Inc. agreed to pay $282 million in penalties and a Brazilian unit admitted to violating a U.S. anti-bribery law, providing a relatively subdued ending to a seven-year investigation that spanned the globe and at one point looked poised to yield record foreign-corruption fines.

In parallel announcements on Thursday, the Justice Department and the Securities and Exchange Commission faulted the country’s largest retailer over payments made to fast-track store openings in Mexico, China, Brazil and India. Walmart will pay about $138 million in criminal penalties and $144 million in disgorgement to resolve the SEC’s allegations.. . . more

Survey: Customers want leading-edge tech, do retailers deliver?

Chain Store Age
Retailers are overestimating the effectiveness of their customer-facing solutions.

According to “The Sci-Fi Shopper: How to Future Proof Your Brand for the New Consumer,” a survey of consumers and retailers from e-commerce software provider Elastic Path, retail respondents rated their offerings in “futuristic” shopping a 7 out of 10. Customers, however, rated them a 4.. . . more

Largest daytime cafe poised for rapid expansion

Chain Store Age
A restaurant concept that specializes in upscale breakfast, brunch and lunch and closes at 2 p.m. is on the move.

Another Broken Egg Café announced it recently signed nine new franchise agreements, resulting in the development of 28 new units in Alabama, Arizona, California, Florida, Kansas and Texas. The company, which currently operates 68 locations in 12 states, has set a goal of 300 units by 25.. . . more

Amazon reprises dorm shopping deals

Retail Dive
Amazon on Thursday announced that it's reprising its "Off-to-College store," a curated page of dorm room and class essentials, plus apparel and electronics.

Prime Student members will get special deals while the store is up, according to a press release emailed to Retail Dive. Amazon will also announce special prices daily.. . . more

Five retailers among 100 best CEOs in new survey

Chain Store Age
Charles C. Butt, CEO of H-E-B, took the No. 2 spot on Glassdoor’s Employees’ Choice Awards, honoring the top 100 CEOs in 2019 in the U.S. Butt earned a 99% approval rating based on employee ratings.

Only one other retailer cracked the top 10: Hubert Joly, who stepped down as chief executive of Best Buy on June 11 to transition to the role of executive chairman. Joly, at No. 10, had a 97% rating) The other retailers who make the top 100 were Costco’s Craig Jelinek (No. 42), Wegman Food Markets’ Coleen Wegman (No. 52) and Trader Joe’s Dan Bane (No. 93).. . . more

Retailers J.C.Penney, Macy's oppose proposed tariffs on apparel, footwear

Reuters
Department store operators J.C. Penney Co Inc and Macy’s Inc have opposed U.S. President Donald Trump’s proposal to include apparel and footwear among the Chinese goods targeted for tariffs.

The companies warned that U.S. consumers would have to pay more as they would not be able to quickly shift sourcing from China for items listed in separate letters dated June 17 and posted online to the U.S Trade Representative.. . . more

Panera Is Testing A Dinner Menu With Rice Bowls, Artisan Flatbreads, And Hot Sandwiches

delish.com
Anyone who has eaten at Panera Bread knows the joy that is eating a hot bowl of the mac and cheese, whether it's for breakfast (respect), lunch, or dinner. While said dish is undeniably the best on the menu (don't @ me), Panera has some delicious new options coming to an all-new dinner-centric menu.

Featuring hearty, wholesome, and homemade meal choices, Panera's new dinner menu will feature ten hand-crafted items available to order from 4:30 to 10 p.m. daily, beginning in Lexington, KY, and Providence, RI, in September 2019.. . . more

Thursday, June 20, 2019

Lululemon shutters men's only stores

Retail Dive
Lululemon closed its two men's only stores in the fourth quarter, in SoHo and Toronto, a company spokesperson told Retail Dive in an emailed statement. The SoHo men's store was consolidated with two other locations to form a larger "experiential location" on Broadway.

When asked about future men's only locations, the spokesperson said the company was "focused on our co-located strategy," and noted that the men's business has been experiencing growth, including a comps rise of 26% in Q1 and revenue growth of 33%.. . . more

New department store concept to open its doors in Manhattan

Chain Store Age
Neighborhood Goods is bringing its department store of the future model to the Big Apple.

The company announced it will open its second location to date, in Manhattan’s Chelsea Market. Opening in fall 2019, the store will feature its own restaurant concept specific to the locale and an ever-changing selection of brands and products relevant to the New York market.. . . more

Sycamore lowers bid for Chico’s FAS — again

Chain Store Age
A buyout offer for Chico’s FAS has gone lower for the second time.

Sycamore Partners has revised its buyout offer for the struggling women’s apparel retailer to $3.00 a share, or $350 million, in cash as the chain continues to battle sliding sales. In May, Chico’s rejected an offer from Sycamore for $3.50 per share after previously having turned down its offer of $4.30 per share. . . . more

Amazon drones may do more than deliver

Chain Store Age
The 1982 Alan Parsons Project classic “Eye in the Sky” might be a good theme song for Amazon’s planned drone fleet.

According to The Telegraph, Amazon has filed for a U.S. patent on “surveillance as a service” technology that would monitor customer homes from its delivery drones. The drones would film and record customer homes as they passed overhead, looking for signs of break-ins, vandalism, or other problems. Anything suspicious would be photographed and/or recorded and sent to the customer and local police.. . . more

Can James Daunt Save Barnes & Noble from Oblivion?

NREI
U.K.-based hedge fund Elliott Advisors announced earlier this month that it will acquire the flailing Barnes & Noble bookstore chain in an all-cash transaction valued at $683 million, including debt. That breaks down to $6.50 per share.

The once-powerhouse U.S. bookseller will now become private after being publicly-traded since 1993. Elliott also owns Waterstones, Britain’s biggest bookstore chain, which it acquired in June 2018. This new deal brings together the largest booksellers in the U.S. and the United Kingdom. Barnes & Noble operates 627 U.S. locations and Waterstones has 293 bookshops in the UK, Ireland, The Netherlands and Belgium.. . . more

Apple Is Partnering With Best Buy for Repairs. Is That Enough to Fix Consumers' Complaints?

Fortune
Apple announced Wednesday that it’s adding Best Buy retailers to its previously-exclusive list of authorized repair locations.

The facts of the exchange are simple: Nearly 1,000 Best Buy locations can now offer Apple-certified repairs with an Apple-certified technician. This brings the number of the third-party repair locations to 1,800, a figure that doesn’t include the just under 300 U.S. Apple Store locations.. . . more

People thought Hubert Joly was ‘crazy or suicidal’ for taking the job as Best Buy CEO. Then he ushered in its turnaround

CNBC
When Hubert Joly took on the CEO role at Best Buy in 2012, it was being pummeled by Amazon. Naysayers had all but written off the company. Then, he ushered in one of the greatest revivals retail has seen over the past decade.

By the time Joly announced he was stepping down as CEO in April, Best Buy had achieved same-store sales growth for the past eight quarters. By the latest fiscal year, it had already achieved the financial targets it set for fiscal 2021. . . . more

Wednesday, June 19, 2019

Sam’s Club associates in need of info can go ask Sam

Chain Store Age
Whether they want to remember what the dormouse said or check store inventory levels, Sam’s Club employees can “Ask Sam.”

The Walmart warehouse club subsidiary recently rolled out Ask Sam, a voice-responsive app that acts as a digital assistant when associates ask questions on their mobile device. This app is now available to all associates in the chain’s nearly 600 stores nationwide.. . . more

Backstage and Story are very pretty. But, will they lure shoppers to Macy's?

Retail Dive
Macy's most recent earnings had mixed results. While revenue dipped slightly to $5.5 billion from $5.54 in the year-ago quarter, the company landed its sixth consecutive quarter of comparable sales growth, and pointed to mobile as its "fastest-growing channel."

The department store seems to be self aware and is making decisions to shake itself up and attempt to vary its retail strategy. Two of the most notable efforts are the addition of the narrative-driven, rotating, in-store retail space Story, and the retailer's off-price efforts via the Macy's Backstage concept.. . . more

Barnes & Noble narrows Q4 loss and swings to profit for full year amid falling sales

Chain Store Age
Barnes & Noble reported mixed results for its fourth quarter and full year as it prepares to go private.

The struggling bookseller reported a net loss of $18.7 million for its fiscal fourth quarter ended April 27 compared to a loss of $21.1 million.

Sales totaled $755.4 million, down from $786.1 million last year. Same-store sales fell 2.3%.. . . more

BJ’s launches popular shipping option – with a price

Chain Store Age
BJ’s Wholesale Club is the latest retailer to offer two-day shipping.

BJ’s is quietly introducing a new program called BJ’s Stocked, which delivers essential products in two days. So far, the retailer has only announced BJ’s Stocked via social media and a banner ad on its homepage.

Eligible items include canned and packaged food, candy and cookies, health and beauty, cleaning, and baby and kids. Orders must be placed by 1 p.m. for two-day delivery.. . . more

Target CEO Brian Cornell reiterates forecast, apologizes to customers for weekend outages

CNBC
Target CEO Brian Cornell apologized to customers for a disappointing weekend after the company experienced outages that shut down its cash registers and credit-card processors for several hours.

There was no impact to the company’s earnings forecast as a result of the outage, said Cornell in an interview on Wednesday with CNBC’s Becky Quick on “Squawk Box.” . . . more

Amazon adds more jets to its growing fleet

Seattle Times
Amazon’s fleet of jets is getting bigger.

The online shopping giant said Tuesday that it will lease 15 more Boeing 737s as it seeks to grow its delivery business and get packages to shoppers’ doorsteps faster. Amazon is in the midst of speeding up its delivery time to one-day from two for its Prime members.

Amazon said it currently has 42 planes in its fleet and will have 70 by 2021.. . . more

Fenway’s Time Out Market to debut next week

Boston Business Journal
Mark your calendars, Boston area gourmands: Time Out Market, a 15-vendor food hall and cultural market in the Fenway neighborhood, will open Thursday, June 27 at 7:30 a.m.

The 25,000-square-foot market is located on the ground floor of 401 Park, formerly a 1 million-square-foot Sears, Roebuck & Co. warehouse that has been repositioned by real-estate firm Samuels & Associates. . . . more

Tuesday, June 18, 2019

H&M's sales growth fails to ease investors concerns about margin pressure

Reuters
Fashion retailer H&M reported sales grew for a fourth straight quarter on Monday, but also hinted it had needed to invest more to boost its online business, disappointing investors already concerned about margin pressure.

H&M, the world’s second-biggest fashion retailer, has seen profits shrink and inventories rise in recent years as its core brand has not kept up with the online shift and tougher competition, and not reacted fast enough to demand swings. . . . more

Rock bottom: Tracing the decline of diamond retail

Retail Dive
In 1948, De Beers launched its now-famous slogan, "A Diamond Is Forever." But for many diamond retailers, forever is coming to an end.

In 2018, the Jewelers Board of Trade (JBT) reported that 852 U.S. jewelry retailers closed up shop, on top of the 817 retailers that shut down in 2017. Even though new retailers are opening up, it's not enough to offset the closures. The overall jewelry retail industry is shrinking, as confirmed by Richard Weisenfeld, JBT's president, in a January 2019 interview with National Jeweler magazine. . . . more

The Case for Growing in Developing Areas

FSR Magazine
Real estate professionals often say the three most important factors in real estate are location, location, and location. This rings true in residential real estate—however, its impact may be even more significant in commercial real estate for certain kinds of businesses. Some companies may have the luxury of interacting with and serving customers online, but a restaurant is tied to its physical location. While there are certainly stories of successful bistros hidden away off the beaten path and cafe's that gain a large following in spite of being in a less than desirable location, the goal should be to find the most optimal location for the money a business has budgeted for rent/the mortgage. In a fully developed area, this may be relatively straightforward. In a location that has more development on the horizon, research may be a little more challenging. . . . more

How Much Value Is There in Ground-Floor Retail Space at Student Housing Properties?

NREI
Some student housing properties rent their retail spaces to national retailers like CVS or Target. But in other cases, retail spaces inside student housing buildings stand empty for years—unable to support even a pizza shop.

“Most ground level retail is a drag on a student housing project,” says Frederick Pierce, president and CEO of Pierce Education Properties, which invests in, develops and manages student housing properties. “But in the right location, retail, restaurant or food can be an asset to a project and can support credit tenants.”. . . more

Rothy’s, the women’s shoe brand with a cult-like following, is opening more stores

CNBC
Rothy’s, the women’s shoe brand with an almost cult-like following, is making a bigger move into bricks-and-mortar retail.

On Tuesday, Rothy’s announced it will open five stores this fall and promises more are coming in 2020. The five locations will be in the New York’s West Village, on Boston’s Newbury Street, around Georgetown in Washington, D.C., and two in Los Angeles. The company said these are four of Rothy’s highest-penetrated markets for sales. . . . more

Giant Food president tapped to lead Stop & Shop supermarket chain

Boston Business Journal
Ahold Delhaize USA, the Dutch parent company of Stop & Shop, is tapping Gordon Reid as the new president of the Quincy-based supermarket chain.

Reid, the president of Giant Food, another U.S. supermarket chain owned by Ahold Delhaize, will start as the new Stop & Shop president in late July, the company announced Monday.. . . more

Best Buy will sell Flywheel bikes, Hydrow rowing machines in over 100 stores by the end of the year

CNBC
Best Buy is getting into the fitness industry.

The big-box electronics retailer announced Tuesday its plans to open a “dedicated fitness space,” selling spin bikes and connected treadmills, in more than 100 stores by the end of the year.. . . more

Monday, June 17, 2019

How distressed retailers stacked up in Q1 2019

Retail Dive
In a May report, analysts with Moody's described an emerging Darwinian landscape for the industry, where the largest retailers with the healthiest balance sheets take advantage of everybody else's debt woes, underinvestment and execution missteps. The analysts called it a "survival of the fittest" in retail, which could lead to further consolidation of the industry (meaning there could be more big retail liquidations to come).

To some extent, the industry saw that play out in the first quarter of 2019. Walmart, Target, Amazon and Costco have reported relatively booming sales, growth online and sizable profits. But the quarter was tough for many that are trying to find their footing and pay off interest expenses. . . . more

How the American Dream Mega-Mall Is Defying Retail Trends

Footwear News
American Dream has been nearly two decades in the making. This fall, the $5 billion project looks like it’s finally going to open its doors.

The East Rutherford, N.J. complex will feature 3 million square feet of retail, entertainment and dining. Aside from mall mainstays like Zara, Lululemon, Gap and H&M, it will house a Nickelodeon Universe theme park (complete with three record-breaking roller coasters), an indoor ski slope and snowboard park (the first of its kind in North America), a giant Ferris wheel overlooking the New York skyline, a DreamWorks water park and an NHL-size ice rink. . . . more

Domino’s Pizza teams with robotics company Nuro to test automated delivery in Houston

CNBC
Domino’s is taking a new autonomous delivery partnership for a spin.

The pizza chain announced Monday it is teaming with robotics company Nuro for a pilot program in Houston later this year. Nuro has developed a custom unmanned vehicle, called the R2, for delivering goods including food and dry cleaning. Domino’s says it’s interested to learn more about the operational and customer experiences with this type of vehicle, which is built for goods delivery only. . . . more

Walmart launched an unlimited grocery delivery subscription service

The Verge
Walmart has introduced an unlimited grocery delivery service called Delivery Unlimited, as spotted by TechCrunch. The service is an expansion of the company’s existing delivery and pickup efforts, and costs $98 a year.

The company already offered a delivery service for online orders: customers could have items shipped to their nearest store for free, or to their home for a $9.95 delivery fee for each order. TechCrunch notes that this new annual subscription will cost $98 for a year, or $12.95 a month, and allows customers to skip the per-order fee. To use it, customers place their order on Walmart’s site or app, and can select a delivery window for when they want their order delivered.. . . more

These home improvement retailers build highest rankings

Chain Store Age
Hardware cooperatives sat at the top of the J.D. Power 2019 Home Improvement Retailer Satisfaction Study.

Ace Hardware and True Value, which both function as retail cooperatives, rank highest in a tie among home improvement retailers, with a score of 840 on a 1,000-point scale. Lowe’s (834) ranks third. . . . more

President of Lord & Taylor leaves

Chain Store Age
Vanessa LeFebvre, who was appointed president of Hudson Bay Company’s Lord & Taylor division in May 2018, is leaving.

LeFebvre’s resignation comes as the fate of Lord & Taylor, America’s oldest department store, is cloudy at best. In May, HBC announced that it was reviewing strategic options for its Lord & Taylor business that include a possible sale or merger as part of its strategy “to focus on its greatest opportunities.” Lord & Taylor operates more than 40 stores in the Northeast and Mid-Atlantic markets.. . . more

New York Mall's $300 Million Muni Bonds Cut to Junk by Moody's

NREI
Syracuse, New York’s Destiny USA, one of the largest malls in the U.S., had the ratings on about $300 million of municipal bonds cut to junk by Moody’s Investors Service, which said shrinking profits may hinder its ability to meet the terms of a real estate loan.

Moody’s cut the rating on the mall-backed debt issued by a city development agency from Baa3 to Ba2, two steps below investment grade, and assigned a negative outlook, indicating the securities may be downgraded further.. . . more

Friday, June 14, 2019

Consumer sentiment declines in June

Chain Store Age
Tariff concerns are weighing on American consumers.

The University of Michigan’s consumer-sentiment fell to 97.9 in June from 100 in May. Economists had expected a reading of 99.

“Some of the decline was due to expected tariffs on Mexican imports, which may be reversed in late June, but most of the concern was with the 25% tariffs on nearly half of all Chinese imports,” said Richard Curtin, chief economist, surveys of consumers, University of Michigan.. . . more

Francesca’s Q1 loss widens; sales plunge; closing at least 30 stores this year

Chain Store Age
Francesca’s, which earlier this year announced it is exploring a “strategic financial review,” reported a net loss of $10.1 million for the quarter ended May 4, compared to prior year quarter net loss of $3.9 million. Adjusted net loss was $6.4 million.

Net sales decreased 13% to $87.1 million from $100.4 million. Same-store sales fell 13% amid a decline in traffic and conversion rates.

Francesca’s expects to close at least 30 locations this year, CFO Kelly Dilts told analysts on the company’s earnings call. The company ended the quarter with 722 stores.. . . more

Retail sales look strong, with a solid gain in May and upward revision to prior month

MarketWatch
Reports of the death of the American consumer were greatly exaggerated after U.S. May retail sales data rose at a healthy pace and the decline in the prior month was revised to show a gain.

U.S. retail sales increased 0.5% in May, with broad-based gains, the Commerce Department said Friday. Economists polled by MarketWatch had forecast a solid 0.7% gain.

There was a big rise in auto sales, but retail sales excluding the sector rose 0.5%, the government said. . . . more

Manhattan’s Newest Flagship Department Stores Are Ignoring the Retail Apocalypse

Bloomberg
Manhattan is undergoing an unprecedented shift in its shopping scene.

Gone are the gargantuan Lord & Taylor and the Henri Bendel flagship and the Saks Fifth Avenue women’s store downtown. New arrivals are Neiman Marcus and Nordstrom.

The turnover underscores the extent of the duress that the retail industry is going through in the age of Amazon. On a net basis, the city will lose about 340,000 square feet of department stores this year—the equivalent of two Walmart Supercenters. . . . more

New estimate says Amazon's U.S. online market share not as big as prior guess

The Dallas Morning News
A closely watched researcher has cut its estimate of Amazon.com Inc.'s share of the U.S. e-commerce market after incorporating new figures from the company.

EMarketer Inc., among the most widely cited sources for estimates of U.S. online retail sales, says it now expects Amazon to account for 37.7% of online commerce this year, down from a prior estimate of 47%. The new market share numbers were reported earlier Thursday by the Information. . . . more

Massachusetts lawmakers set dates for 2019 sales tax holiday weekend

Boston Business Journal
Massachusetts lawmakers agreed Thursday to implement this year's sales tax holiday on the weekend of Saturday, Aug. 17 and Sunday, Aug. 18.

It was the first time lawmakers established the annual sales-tax holiday dates through a process established under a 2018 law that calls for legislators to choose by June 15 a weekend in August to designate as the holiday. If legislators missed that deadline, the Department of Revenue would have had until July 1 to announce dates for the holiday.. . . more

Thursday, June 13, 2019

Burlington opening 50 new stores in continued expansion, bucking latest retail trend

WSOCTV.com
Burlington Stores, formerly Burlington Coat Factory, will open 50 new stores this year.

The company announced it will continue its expansion this year with an investment of $310 million.

During the first quarter of the year, new and non-comparable stores added $121 million in sales. The company saw strong earnings, with sales increasing 7.4 percent and comparable store sales jumping 0.1 percent.. . . more

Another Destination Maternity CEO out amid sales plunge

Retail Dive
Destination Maternity on Wednesday announced that Marla Ryan, "by mutual agreement with the Board," would step down as chief executive officer, effective Thursday. She's staying on to assist with the transition and will take a new role as president of product design, sourcing and merchandising, according to a company press release.

The maternity apparel retailer on Wednesday also reported a dismal first quarter. Net sales plummeted 8.7% to $94.2 million, hurt by the net closure of 32 owned and 88 leased locations, and a 7.2% comp sales slide.. . . more

Mall Landlords Can Benefit from Retail Space Sharing

NREI
Rising vacancies are giving rise to sharing retail space, a concept involving multiple digital brands sharing space with shorter term rental agreements.

Traditional bricks-and-mortar retailers normally sign a lease of around five to 10 years, according to Jeff Berta, senior director of real estate development at Structured Development, a real estate development company. But emerging brands are instead opting to sign a license with an already existing retailer, as opposed to a lease. This license can last anywhere from a week to multiple months, allowing retail center landlords to fill up space with new brands and brands to test new locations and demographics without an expensive long-term lease commitment.. . . more

A Bankruptcy May Be in Forever 21’s Future, But the Chain Will Survive, Experts Say

NREI
Struggling Forever 21 is reportedly eyeing significant turnaround plans.

Faced with diminishing mall traffic and falling sales due to competition from other affordable apparel retailers and trendy online fashion brands, the fast-fashion retailer is exploring a restructuring, Bloomberg reported last week.

Forever 21 is reportedly in discussions with private equity firm Apollo Global Management, “considering raising debtor-in-possession funds to provide financing should it plan to file for bankruptcy.”. . . more

For scouting new locations, is it digital maps or paper maps?

Chain Store Age
Over the past few years, myriad digital mapping, geo-fencing, and data collection companies have offered tech-powered services to help retailers find and plan new locations.

But Tri-Land Properties, a 40-year-old company that has proven itself adept at turning around centers in promising areas, hasn’t thrown out its paper maps. . . . more

Delivery wars: Target expands same-day shipping option in the latest move against Walmart, Amazon

USA Today
Target is bringing its same-day delivery option to the masses — the latest move in an ongoing delivery war involving the big-box retailer, Walmart and Amazon.

Target announced Thursday that online shoppers in 47 states will now be able to get items delivered same day by paying a flat fee of $9.99 per order. It’s using Shipt, a membership-based, same-day delivery platform it acquired for $550 million in 2017, to do this.. . . more

Green Growth Brands in rapid rollout

Chain Store Age
Green Growth is delivering on its promise of rapid expansion.

The cannabis and CBD brand announced that it has opened more than 50 shops under its Seventh Sense banner during the past four months. The merchandise mix is made up of botanical therapy CBD-infused personal care and beauty products, with more than 100 SKUs across bath, body, face, therapeutic, and sleep categories.. . . more

Highly anticipated report details the most important trends on the internet

Chain Store Age
Twenty-six percent of U.S. adults now describe themselves as “almost constantly online.”

That’s just one of the many interesting stats contained in Mary Meeker’s annual “Internet Trends” presentation, which has grown into one of the most closely-watched reports of the year by tech investors and the tech community at large. . . . more

Wednesday, June 12, 2019

Will the once marvelous department store ever come back?

Retail Dive
Private labels. Localization. Home delivery. Knowledge about the customer. Personalization and customization. Most of the innovations that are fueling today's most successful retail startups have less to do with avant-garde tech like AI and robots and more to do with wowing the customer with the right merchandise, an appealing store environment and a high level of service.

Department stores, which have seen their market share relentlessly depleted in recent years, aren't generally at retail's cutting edge. That was ceded to Amazon, mass merchants like Walmart and Target and a slew of digital natives that sought out market chinks and vulnerabilities to disrupt. . . . more

Lawsuit alleges Ascena misled public about 'complete disaster' at Ann Taylor, Loft

Retail Dive
An Ascena shareholder has filed a class action suit against the apparel retailer alleging that the company and top executives misled investors about troubles in its Ann Inc. unit after acquiring the brand in 2015. The company has not filed a response to the suit, and a spokesperson did not immediately reply to a request for comment.

The complaint alleges that by September 16, 2015 — less than a month after the deal (which included the Ann Taylor and Loft brands) closed — the acquisition "was a complete disaster for the Company as Ann's operations were in far worse condition than represented to the public.". . . more

11 predictions for retail real estate’s best friend: grocery

Chain Store Age
Though grocery sales rarely peak high in times of retail growth, they rarely dip in times of retail decline.

That’s why so many retailers want to snuggle up next to supermarkets in shopping centers, says a new report from CBRE.

Grocery-anchored strip or neighborhood centers have suffered fewer vacancies than power centers and malls and currently boast the highest occupancy of all shopping center types nationally, according to CBRE.. . . more

The most valuable brand in the world is ….

Chain Store Age
Tech companies continue to dominate an annual listing of the most valuable global brands.

With little sign of a slowdown in growth, Amazon took the top spot in the 2019 BrandZ Top 100 Most Valuable Global Brands by WPP and Kantar. Rising in brand value by 52% year-on-year to $315.5 billion, Amazon moves ahead of Apple (No. 2, $309.5 billion) and Google (No. 3, $309.0 billion), which both rose by a modest 3% and 2% respectively, to end the technology giants’ 12-year dominance. Microsoft and Visa rounded out the top five. Technology companies have led BrandZ’s Top 100 ever since its first global brand value ranking in 2006, when Microsoft took the top spot.. . . more

Neiman Marcus Kicks The Can Down The Road. So Now What?

Forbes
Yesterday brought two big pieces of Neiman Marcus news. The day started with the announcement that the company had successfully extended the maturities on some $4.6 billion in debt. Then a few hours later Neiman's reported quarterly results, which were both disappointing and concerning. After six consecutive quarters of growth, comparable sales were down 1.5% and the luxury retailer posted a net loss of $31.2 million for the quarter. This compares to a net loss of $19.9 million a year earlier.

Restructuring the company's debt provides important breathing room. When the company went through its second private equity led leveraged buyout in 2013, the new owners clearly overpaid and saddled the company with interest payments that constrain the company's ability to execute a long overdue transformation. . . . more

Kohl's will close Off/Aisle discount stores, company tells employees

Journal Sentinel
Kohl's will close its Off/Aisle stores, ending a four-year-old foray into discount retailing, the company told employees Tuesday.

The four Off/Aisle locations — in Wauwatosa, Brown Deer, Waukesha and Cherry Hill, New Jersey — will close on Aug. 3, Jon Grosso, an executive vice president, said in a memo to staff.

Grosso's message suggested that the discount outlets are being shuttered not because they were unsuccessful, but because improved inventory management at regular Kohl's department stores has left the firm unable to supply the Off/Aisles with enough merchandise. . . . more

Joly bids adieu to CEO role at Best Buy; Barry takes helm

StarTribune
Hubert Joly officially bid adieu as Best Buy Co. Inc.'s chief executive Tuesday morning in a brief webcast of the annual shareholders meeting.

Joly moves into a newly created role as executive chairman of the board. His hand-picked successor, Corie Barry, a 20-year veteran of the Richfield-based company, officially assumed the role as CEO at the conclusion of the meeting.. . . more

Tuesday, June 11, 2019

Amazon is shutting down its food-delivery business

Quartz
Amazon plans to shutter its four-year-old Amazon Restaurants delivery service in the US this month, GeekWire reported June 10.

The service, which launched in Seattle in 2015, had expanded to roughly two dozen US cities and London. Amazon closed Amazon Restaurants in the UK in December 2018, after two years of operation.. . . more

Grocery Outlet kicks off IPO

Supermarket News
After unveiling plans to go public earlier this year, Grocery Outlet Bargain Market today launched an initial public offering.

Emeryville, Calif.-based Grocery Outlet currently has 323 stores in California, Idaho, Nevada, Oregon, Pennsylvania and Washington.. . . more

As Walmart and Amazon war escalates, smaller retailers caught in the crossfire

Retail Dive
The battle of the retail giants has only intensified this year. A new report from Moody's analysts led by Charlie O'Shea looks at the fallout and possible outcomes as Amazon and Walmart throw competitive jabs and make forays onto turf long dominated by the other.

The analysts noted a "delivery arms race" that is "escalating," with Amazon and Walmart each announcing various takes on next-day shipping within a month of each other this spring. They also posited that Walmart could make gains in an area long dominated by Amazon: third-party sellers. Helping Walmart on this front are its physical stores, which offer space to outsiders, and something it doesn't have: Amazon's propensity for developing competing brands.. . . more

Ascena net loss widens to $238M in Q3

Retail Dive
Ascena Retail Group on Monday reported that third quarter net sales edged down to $1.266 billion from $1.267 billion in the year-ago period, with comparable sales flat year over year, according to a company press release.

By brand in the quarter: Comps at the company's premium brands (Ann Taylor and Loft) rose 5% as net sales rose to $549.5 million from $532.7 million a year ago. At plus banners Lane Bryant and Catherines, comps fell 3% as net sales fell to $311.5 million from $312.8 million in the year-ago period. At kids' banner Justice comps fell 5% as net sales fell to $227.4 million from $233.8 million a year ago. At Dressbarn, which is to be folded, comps fell 4% as net sales fell to $177.3 million from $187.4 million last year.. . . more

Bain & Co.: Threat of retail takeovers, failures very real

Chain Store Age
Retailers have a great deal of work left to do to secure their future.

That’s according to an analysis by Bain & Company, The Future of Retail: Winning Models for a New Era, which found that U.S. retailers accounting for nearly 30% of the sector’s entire profit pool are currently at risk of takeover or failure unless they can address specific shortcomings in scale, innovation and data-led consumer understanding.. . . more

Readerlink Works Toward Higher Offer for Barnes & Noble

The Wall Street Journal
Book distributor Readerlink LLC is working toward making a bid for Barnes & Noble Inc.that would top the price hedge fund Elliott Management Corp. agreed to pay for the book retailer, a person familiar with the situation said.

Barnes & Noble said Friday it had reached an agreement to be acquired by Elliott for $6.50 a share, or $475 million in cash. Including the assumption of debt, the deal is worth $683 million.. . . more

Chico’s Q1 profit, sales fall but beat Street; cuts outlook

Chain Store Age
Chico’s FAS’ earnings, revenue and same-store sales declined in the first quarter as the struggling apparel retailer works to get itself back on track under new leadership.

In March, Chico’s appointed a new leader, Karen McKibbin, as president of its namesake brand and said it would close 60 to 80 stores in 2019 following a disappointing fourth quarter. . . . more

Harvard taps Berkeley to redevelop Allston's long-vacant Boston Tech Center

Boston Business Journal
Harvard University has tapped Berkeley Investments as a partner to redevelop 176 Lincoln St., a vacant property spanning nearly half a million square feet, that Harvard has owned since 2006.

It’s unclear what Berkeley’s plans are for the Boston Tech Center — whether the Boston-based real estate company intends to raze the property and build something new, or repurpose the property in some way. The company has completed a broad array of projects in the region, from loft apartments in Boston’s Seaport and Somerville, to commercial projects in Waltham and downtown Boston, and retail/restaurant projects, including Row 34 and Flour Bakery in Boston’s Fort Point Channel. . . . more

Monday, June 10, 2019

May restaurant sales continue roller coaster ride

Nation's Restaurant News
The roller coaster the restaurant industry has been riding since the beginning of the year showed no signs of stopping in May, according to new data from Black Box Intelligence™, a division of Dallas-based TDn2K™.

After a disappointing April, restaurant same-store sales in May returned to positive territory with strong 1.1 percent growth. This represented a robust 1.6 percentage point rebound compared with last month’s year-over-year growth rate.. . . more

Krispy Kreme to open 24-hour flagship — in Times Square

Chain Store Age
Krispy Kreme plans to open a flagship in early 2020 in Times Square, on Broadway and 48th Street, that it promises will offer “the most awesome doughnut experience imaginable.” In addition to hot, fresh doughnuts round the clock, the 24-hour outpost will feature the world’s largest “hot light,” immersive and interactive digital experiences and exclusive merchandise.

The 4,500-sq.-ft. store, which is expected to serve more customers annually than any other Krispy Kreme location in the world, will showcase the doughnut-making process from start to finish, from the mixing of raw ingredients to the brand’s iconic glaze “waterfall.” Customers will be able to enjoy their purchases while sitting in an stadium-styled seating area designed as the world’s largest Krispy Kreme doughnut box.. . . more

Barnes & Noble Can’t Blame Amazon for Everything

NREI
Barnes & Noble Inc. had been buyout bait for so long it should not have been a surprise when the company announced on Friday that Elliott Management Corp. had agreed to buy the big-box book giant for $683 million, including debt. The bookseller had said in October that it was exploring strategic alternatives. Even before that, smart observers such as my colleague Tara Lachapelle had noted it would be a tempting takeout target.

Still, when the moment came, it seemed to be, if not exactly a shock, then certainly an important turning point. Without a doubt it was a humbling moment . . .more

Retailing at the end of the world: How large chains liquidate

Retail Dive
When Payless Shoesource exited Chapter 11 in August 2017, it had shed $435 million in debt and hundreds of stores. With a rightsized footprint and balance sheet, executives told Retail Dive at the time the footwear retailer was working to build out omnichannel capabilities such as ship-to-home and pickup-in-store to bring it in line with peers.

The optimism didn't last long. That holiday season, as a restructuring officer would later explain in court papers, a key supplier got behind on shipments, disrupting inventory flows. The next year, a computer breakdown created another crisis during the back-to-school season. Overstock led to discounts on millions of pairs of shoes during this past holiday season. . . . more

J.C. Penney Loses a Key Finance Executive

Bloomberg
J.C. Penney Co.’s management ranks are bracing for another change.

Trent Kruse, senior vice president of finance at the beleaguered retailer, will be exiting the company effective June 14 to pursue other opportunities, according to people familiar with the matter. . . . more

FedEx Says It’s Ending Express Shipping Service for Amazon

The New York Times
It’s unusual when a major corporation boasts about its decision to cut back on doing business with Amazon.

But FedEx’s announcement on Friday that it would not renew its contract to provide express shipping service for Amazon in the United States was a signal that it believes e-commerce is bigger than just one company. FedEx said its “strategic decision” would allow it to focus on “serving the broader e-commerce market.” . . . more

Hudson's Bay shareholder group proposes C$1.74 billion go-private deal

Reuters
A group of shareholders, including Hudson’s Bay Co’s Executive Chairman Richard Baker, on Monday offered to take the Canadian retailer private in a C$1.74 billion cash deal.

Hudson’s Bay, which owns Saks Fifth Avenue and Lord & Taylor, said it has formed a special committee of independent directors to review the proposal. . . . more

Friday, June 7, 2019

Why Whataburger, J.C. Penney and other businesses are crying foul over this goof in 2017 tax revamp

The Dallas Morning News
Tax writers had intended to reward restaurateurs and retailers by allowing them to write off renovation costs immediately, rather than over 15 years. But a drafting error instead increased those businesses’ tax burdens, forcing them to depreciate such expenses over 39 years.

Heavyweight brands ranging from Whataburger to J.C. Penney to  Brinker International to Neiman Marcus, along with myriad franchise owners , are pushing Congress to fix what’s being called the “retail glitch.”. . . more

At Home Group Inc. Announces First Quarter Fiscal 2020 Financial Results

Yahoo Finance
At Home Group Inc., the home décor superstore, announced its financial results for the first quarter ended April 27, 2019.

Lee Bird, Chairman and Chief Executive Officer, stated: “It was a challenging first quarter as we faced unusually adverse weather across a majority of our markets, resulting in comparable store sales below our expectations. However, favorability in new store weeks and the solid productivity of our non-comp stores enabled us to deliver nearly 20% net sales growth and adjusted earnings per share at the low end of our outlook range. Because of the challenging weather, we have already taken swift markdown actions in order to sell through the necessary product at lower than expected margins and head into the fall in a cleaner inventory position.”. . . more

Can Sears Survive by Opening Smaller-Format Stores?

NREI
In an effort to stage a comeback, Sears unveiled a new, small-format store called Sears Home & Life. Three locations are now open in Overland Park, Kan.; Lafayette, La., and Anchorage, Alaska. The new stores will typically be around 10,000 to 15,000 sq. ft., which is significantly smaller than Sears’ traditional stores, which are in the 150,000-sq.-ft. range. (The Anchorage store is only 7,500 sq. ft).

The concept won’t carry any apparel, but instead will sell major and small kitchen appliances, tools, mattresses and home services. . . . more

Guess grows loss and revenue in Q1

Chain Store Age
Guess Inc. beat Wall Street expectations with generally positive financial results for the first quarter of fiscal 2020.

Guess saw its adjusted net loss grow 10% to $19.6 million from $17.8 million the first quarter of the previous fiscal year. However, the vertical apparel retailer also increased total net revenue for the first quarter 3% to $536.7 million, compared to $521.3 million in the prior-year quarter. U.S. same-store sales, including e-commerce, rose 4%. U.S. retail revenue climbed 3%.. . . more

U.S. economy adds disappointing 75,000 jobs in May, unemployment rate holds at 3.6%

Yahoo Finance
Job growth slowed more-than-expected in May, while the unemployment rate held at a near 50-year low, according to the Department of Labor’s Friday report.

The U.S. economy added just 75,000 non-farm payrolls in May. This was below expectations for 175,000 non-farm payroll additions, based on Bloomberg-compiled estimates.. . . more

Forget the porch. Walmart will deliver groceries right to your fridge starting this fall

USA Today
Starting this fall, Walmart customers can not only buy groceries online, they can then have them dropped off right in their kitchen.

More than 1 million shoppers in Kansas City, Mo., Vero Beach, Fl, and Pittsburgh, Pa. will be able to use Walmart's new "InHome'' service, the latest volley in the delivery wars being waged by retailers racing to woo customers with convenience and speed.. . . more

Elliott Management to acquire Barnes & Noble for $683 million

CNBC
Activist firm Elliott Management announced Friday it plans to acquire bookseller Barnes & Noble for roughly $683 million, including debt.

The deal values Barnes & Noble at $6.50 a share, a 43% premium to the retailer’s 10-day volume weighted average closing share price before news of an imminent deal leaked Thursday.. . . more

Thursday, June 6, 2019

Charlotte Russe – retail’s latest comeback kid

Chain Store Age
Specialty apparel retailer Charlotte Russe is back before a lot of customers may have had the chance to say goodbye.

YM Inc., new owner of Charlotte Russe, is re-launching Charlotte Russe retail outlets across the U.S., with five of 100 planned locations opening their doors today. Retail locations in Southland Center in Michigan, Cumberland Mall in Georgia, Willowbrook Mall in New Jersey, Park City Center in Pennsylvania, and Monmouth Mall in New Jersey are now open. Customers can also shop Charlotte Russe’s online store, charlotterusse.com, which re-launched June 3, 2019.. . . more

Michaels crafts Q1 results that meet expectations; will open 20 net stores

Chain Store Age
The Michaels Companies Inc. met its own guidance and analyst projections with its first-quarter sales and EPS results, and has store expansion plans.

During the first quarter of fiscal 2019, Michaels reported net sales of $1.09 billion, down 5% from $1.15 billion in the first quarter of fiscal 2018 and within the company’s previously released guidance.

According to Michaels, the decrease in net sales was primarily due to the closure of the Pat Catan’s and the Aaron Brothers stores during fiscal 2018 and a 2.9% decline in same-store sales. Net income was a bright spot, rising 40% to $37.7 million from $26.9 million the prior year period.. . . more

Bank Exposure Risk on CRE Lending Creeps Higher

NREI
Banks are enjoying near record low commercial real estate loan delinquency rates at 0.5 percent. Yet some industry observers are cautioning that there could be greater risk exposure emerging among some banks that has the potential to snowball into bigger problems in the event of a downturn.

CrediFi recently published a commercial real estate lending report that suggests that the banking system has much greater commercial real estate risk exposure than publicly recognized. Top concerns highlighted in the report are associated with levels of lending to “more opaque” property sectors, including retail and industrial. . . . more

Walmart shareholders’ meeting – wages, vests – and Bernie Sanders

Chain Store Age
A wide range of topics were covered at Walmart’s annual shareholders’ meeting.

The June 5 meeting, held at Walmart’s Bentonville, Ark. headquarters, featured CEO Doug McMillon calling for an increase to the federal minimum wage. The discount giant also introduced a new vest that store associates will wear and Sen. Bernie Sanders (I-Vt.) addressed the audience with some pointed remarks.

Following is a brief recap of these meeting highlights.. . . more

Amazon unveils new Prime Air drone

Chain Store Age
Amazon  publicly debuted the new drone at its re:MARS conference (Machine Learning, Automation, Robotics and Space) in Las Vegas. The new drone features a hybrid design, meaning it can perform vertical takeoffs and landings like a helicopter. However, the drone can also shift to an airplane mode once it is in the air for efficient, aerodynamic flight.

Amazon intends the new drones to fly up to 15 miles and deliver packages under five pounds to customers in less than 30 minutes.. . . more

Dollar General is No. 1 retailer for opening stores this year

CBS News
Even as the so-called retail apocalypse snaps up stores across the country, one seemingly unlikely business has remained standing, and thriving, in the digital era: Dollar General. While many once-mighty retailers close up shop, dollar stores overall are prospering: Out of nearly 2,780 stores slated to open thus far in 2019, about 1800, or more than half, are from discount chains, according to Coresight Research.

The top five retailers for planned store openings are Dollar General, Dollar Tree, Family Dollar, Aldi and Five Below. Dollar General alone is planning to open 975 stores, or nearly one-third of all stores announced to open thus far, making it the No. 1 company for expansion this year by a long shot. Dollar Tree follows with about 350 planned store openings. . . . more

Wednesday, June 5, 2019

This statistic is a key reason why Walmart, Target and Costco are thriving while other retailers aren’t

CNBC
Retailers should take note that the spending power of sticker-conscious shoppers is on the rise. Bank of America Merrill Lynch in a new research report said purchases made by low-income consumers (U.S. households making less than $50,000 per year) grew 6% this past April from a year ago, outpacing both middle- and upper-income consumers’ spending growth across the country.

Consumer confidence remains high despite an ongoing trade war between the U.S. and China, and unemployment levels remain low. And so many low-income shoppers have been encouraged at the start of the year to spend a little more. But they’re not going to Tiffany or Nordstrom to do that. They’re just spending more at places like Walmart and Dollar Tree. . . . more

Investment in Power Centers Spikes, In Spite of Troubles in the Larger Retail Sector

NREI
 Investment sales involving power centers increased by 30.4 percent in the first quarter of 2019, marking it the most active first quarter since 2016, according to research from real estate services firm JLL.

“Power centers have seen a decline in transaction volume over the last couple of years. The subsector is transitioning from a low, tempered amount of activity to a bit of a spike, but it’s still all relative,” says Arielle Einhorn, research manager with JLL Investor Research. “It’s not that power centers are outperforming other sectors, it’s outperforming itself. It’s seeing new appetite come around.”. . . more

Microsoft confirms phase-out of mall kiosks

Chain Store Age
Microsoft has reportedly acknowledged it has shuttered all of its “specialty stores.”

According to ZDNet, the technology titan has finished the job of gradually closing a collection of mall-based kiosks and pop-ups it classified as specialty stores. The last round of closures affected 17 locations. Microsoft is reportedly eliminating the specialty stores as part of an effort to focus more on flagship stores, with a flagship store set to open in London next month.. . . more

Retailers see opportunity in online customer behavior

Chain Store Age
Most retailers expect their e-commerce revenue to increase, according to a new study from Boston Research Partners (BRP).

According to “The E-commerce Effect,” 74% of retailers expect an increase in e-commerce revenue next year, and 72% expect higher mobile website revenue. Less than half of retailers expect revenue growth from channels such as mobile app (49%), social media (47%), and brick-and-mortar (38%).. . . more

Destiny USA gets extension on mortgage

Syracuse.com
Pyramid Management Group and Wells Fargo Bank have reached an agreement to extend the maturity date of the Syracuse shopping mall’s mortgage.

The agreement, announced Monday by Pyramid CEO Steve Congel, comes three days before $430 million in mortgage loans on the big regional retail center were scheduled to expire.

Pyramid borrowed the money from J.P. Morgan Chase in June 2014. In April, the loans were sent to a special servicer, Wells Fargo Bank, after Pyramid notified the lender that it would not be able to refinance the debt by the maturity date, June 6. . . . more

The video game sales slump is killing GameStop

CNN Business
GameStop is in the wrong line of the business at the wrong time: It's selling physical video games and consoles in brick-and-mortar stores at a time when people are downloading and streaming games from the internet.

The company's first-quarter sales fell 13%, and GameStop announced Tuesday evening it would no longer pay investors a quarterly dividend. GameStop's stock fell 36% Wednesday. . . . more

Bath & Body Works Will Never Die. Here’s Why the ’90s Mall Staple Is Still So Profitable

Money
You know about “dead malls,” right? Those crumbling relics of the shopping world pre-“retail apocalypse?”

The woes of brick and mortar retailers aren’t over yet: More U.S. stores shuttered in the first four months of 2019 than all of 2018, according to Coresight Research. But in many of those eerie old malls, there’s at least one store that’s managed to keep the lights on. And oftentimes, that store is a Bath & Body Works.. . . more

American Eagle is thriving at the mall

Ad Age
In many ways, the success of American Eagle Outfitters Inc. doesn’t make sense. Most teen retailers have struggled to appeal to the newest crop of young shoppers while e-commerce sites have scattered their once loyal customers. It’s a situation that’s led Charlotte Russe and Aeropostale into bankruptcy and Abercrombie & Fitch Co. to close some flagships and shrink the footprint of its stores. Bloomberg News reported Tuesday that fast-fashion retailer Forever 21 Inc. was said to be exploring a debt restructuring to shore up its liquidity.

Yet American Eagle, which has been around for 42 years, has found solid footing. It’s consistently at or near the top of its peer group for revenue growth and digital sales.. . . more

Tuesday, June 4, 2019

Build-A-Bear and Walmart team up, fending off retail apocalypse

Fox Business
Build-A-Bear has survived the declining foot traffic at shopping malls across the country as retail store closures in 2019 already surpass last year's total.

By diversifying its retail areas, Build-A-Bear was able to look into alternative places and expand its accessibility to different types of consumers. Build-A-Bear had partnered with retail giant Walmart in opening shop-in-shops inside six pilot stores last holiday season. Now, it’s looking to expand into 25 additional Walmart stores over the course of this year. . . . more

The consumer is changing, but not how you think

Chain Store Age
Consumer fundamentals don’t change, but their environment does.

According to a new study from Deloitte, increased diversity in the U.S. population is having a significant impact on consumer behavior. Millennials, now representing 30% of the population, are the most diverse generational cohort in U.S. history, with roughly 44% consisting of ethnic and racial minorities. In comparison, only 25% of baby boomers belong to ethnic and racial minorities.. . . more

Fears grow over 'food swamps' as drugstores outsell major grocers

The Guardian
Interspersed among CVS’s glowing fluorescent aisles of laundry detergent, racks of Band-Aids, and over-the-counter digestion remedies, there are shelves of brightly colored cereal boxes. Windowed refrigerators full of milk cartons and microwavable frozen meals for one are within arm’s reach of displays stacked with popcorn, chips and salsa. For the past several years, pharmacies have been quietly stocking and selling more food to Americans who are drawn to one-stop shopping for their everyday essentials.

In 2017, CVS held a 3.9% share of the grocery market. Walgreens came in at 2.4%. That may not seem like much, but it far outpaced both Whole Foods and Trader Joe’s, which had 1.4% and 1% respectively. . . . more