Friday, May 29, 2020

How to Manage Leases and Landlords in Uncertain Times

It’s no secret that signing a lease on a restaurant space is a big commitment. With no way of knowing future circumstances, operators take the plunge and vow to pay various costs, regardless of events to come.

This year, the unthinkable happened, and it affected rents for restaurants ranging from nationwide chains to independent one-offs. In late March, The Cheesecake Factory made waves with its decision to withhold April rent payments as its dining rooms shuttered. Across the U.S., other concepts of all sizes also began considering their options as sales plummeted. . . . more

Big Lots quarterly profit triples; provides upbeat outlook

Chain Store Age
Big Lots Inc. reported first-quarter profit that was well above analysts’ estimates as the COVD-19 pandemic drove a big increase in same-store sales.

The discounter’s net income for the quarter rose to $49.3 million in the quarter ended May 2, from $15.5 million in the year-ago period. 

Sales rose 11.1% to $1.44 billion, above estimates of $1.32 billion. Same-store sales rose 10.3%. . . . more

Five Below reopens stores; resumes expansion program

Chain Store Age
Five Below is not backing down from its aggressive store expansion.

The extreme-value tween and teen retailer, which has opened 40 new stores so far this year, said it continues to expect to open 100 to 120 new stores in 2020.

Five Below said that it has reopened more than 75% of its 900-plus stores as pandemic lockdown restrictions ease. Locations have reopened in all but four states, where curbside pickup is available as allowed. . . . more

J.C. Penney plans to have 500 stores open by next week and asked landlords to forgo rent

The Dallas Morning News
J.C. Penney said its stores are reopening at a faster pace now, and it has asked all of its store landlords for abatements on rent.

The Plano-based department store chain, which filed for bankruptcy earlier this month, said Thursday that it has opened 150 more stores and has 304 open in 27 states.

At a hearing Thursday morning, Penney’s attorney Joshua Sussberg of Kirkland & Ellis said the company plans to begin permanent store closings in June. The process will take 12 to 14 weeks, and Penney is hoping to capture the back-to-school season with sales at stores that are closing, he said. A smaller second batch of store closings will start in July. . . . more

Dollar Tree CEO wonders how long a sales surge from customers spending coronavirus checks can last

Dollar Tree CEO Gary Philbin told CNBC on Thursday that the company noticed a bump in sales related to coronavirus stimulus checks this spring.

“Without a doubt we see it. The further we get away from that, it will be interesting to see how customers respond,” Philbin said on “Squawk on the Street.”

The discount retailer usually observes a sales spike related to tax refunds, Philbin said. But the increase following the disbursement of stimulus checks — part of the government’s $2 trillion coronavirus relief package in March — has been tax refunds “on steroids,” he said. . . . more

Nordstrom touts its ‘flexibility’ as quarterly results miss targets; sales plunge 40%, losses top half a billion dollars

Seattle Times
Nordstrom insists it is well-positioned moving forward despite reporting a 40% drop in first-quarter sales and a loss of more than half a billion dollars in a coronavirus walloping far worse than analysts expected.

CEO Erik Nordstrom told analysts in a conference call after results were released Thursday that the company’s inventory reductions and increased online emphasis leave it with enough liquidity and flexibility as the nation begins to reopen. The company this month reopened nearly 40% of its stores — mostly in smaller markets — and implemented curbside pickup at most full-line locations after shuttering them in mid-March due to pandemic concerns.. . . more

U.S. consumer spending tumbles in April

Yahoo Finance
U.S. consumer spending dropped by a record in April as the COVID-19 pandemic undercut demand, buttressing expectations that the economy could contract in the second quarter at its steepest pace since the Great Depression.

The Commerce Department said on Friday consumer spending, which accounts for more than two-thirds of U.S. economic activity, plunged 13.6% last month. That was the biggest drop since the government started tracking series in 1959, and followed a 6.9% tumble in March.. . . more

Thursday, May 28, 2020

The incredible shrinking department store

Retail Dive
Department stores are dropping like flies.

By interrupting whatever comeback plans they had — and each has been in repair mode in some way or another — the COVID-19 pandemic has pushed most if not all department stores to take drastic measures in recent weeks.

Commercial property research firm Green Street Advisors last month said it expects "a little more than half of all mall-based department stores" to close within two years, and for Penney alone to close "a lot, if not all" of its stores.. . . more

Abercrombie & Fitch Q1 loss widens, sales dive amid temporary store closings

Chain Store Age
Abercrombie & Fitch Co. reported earnings and sales that missed expectations as its stores remained dark due to the COVID-19 crisis. But business is picking up as its stores to reopen.

“With stores reopening in the U.S. and the EMEA regions, we have experienced sales productivity for reopened stores of approximately 80% and 60%, respectively, as compared to last year’s levels,” stated CEO Fran Horowitz. (As of May 28, about half of Abercrombie’s global store base has reopened.) . . . more

Bankruptcy cases, store closings pile up as coronavirus wreaks havoc for J.C. Penney, Hertz, others

USA Today
Companies are rushing to U.S. Bankruptcy Court during the coronavirus pandemic, seeking refuge from their creditors as they grapple with the fallout from temporary store closures and the travel industry shutdown.

Coresight Research, which tracks retail openings and closings, has upped its projected store closures for 2020 from 8,000 at the beginning of the year to 15,000 at the beginning of March to about 25,000 now. . . . more

Dollar General Tops Q1 Earnings Forecast On 'Elevated Demand' During COVID-19 Pandemic

The Street
Dollar General Corp posted much stronger-than-expected first quarter earnings Thursday as consumers flocked to essential and discount retailers amid the peak of the coronavirus pandemic.

Dollar General said diluted earnings for the three months ending on May 1 rose 73% from last year. Group revenues, the company said, surged 27.55% to $8.448 billion, topping analysts' forecasts of a $7.589 billion tally.

Looking into the 2020 financial year, Dollar General said it expects to exceed its previously-stated guidance for net sales, which were forecast to rise between 7.5% and 8%, but withdrew the detailed guidance it issued on March 12.. . . more

Fashion Stockrooms Are Bursting at the Seams

The Wall Street Journal
With fashion retailers sitting on a glut of unsold clothing, shoppers can expect serious bargains once shops reopen. The hit to profit margins could be dire.

Merchandise has piled up at stores since they were closed by lockdown measures. For all U.S. retailers, the inventory-to-sales ratio—a measure of how much stock they hold relative to monthly sales—hit an almost 11-year high of 1.53 in March, according to the Federal Reserve Bank of St. Louis. April data, due to be released in a few weeks, will likely show another jump. . . . more

Nearly 80% of U.S. consumers shopped online for groceries since COVID-19 outbreak

Supermarket News
More Americans are shopping online for groceries and doing it more often since the onset of the coronavirus pandemic, according to a new survey by Inmar Intelligence.

Of more than 300 U.S. consumers polled, 78.7% reported shopping online for groceries after the COVID-19 outbreak, up 39% from before the pandemic, said Winston-Salem, N.C.-based Inmar, which provides data analytics and technology solutions for retailers and manufacturers. What’s more, 56.7% of respondents said they shop for groceries online more often now than before the pandemic. . . . more

Tractor Supply expects huge second quarter

HBS Dealer
Tractor Supply Company has provided a forecast for its second quarter financial results and the company expects a record-breaking period.

The Brentwood, Tenn.-based farm and ranch retailer said that it expects net sales growth of 24% to 25% with comp store sales increasing 20% to 25%. Operating expenses for the second quarter will be at the high end of its previous guidance range of $30 to $50 million, primarily due to Tractor Supply’s response to the COVID-19 crisis, the company said. . . . more

Wednesday, May 27, 2020

Macy’s real estate assets figure in its new refinancing plan

Chain Store Age
Macy’s has started refinancing procedures expected to see it through fiscal 2021.

The department store giant, whose business has plunged amid the COVID-19 pandemic, announced the offering of $1.1 billion in secured notes, which mature in 2025. Macy’s said it intends to use the notes, along with cash on hand, to repay the borrowings under its current $1.5 billion credit facility.

The debt will be secured by some of Macy’s real estate assets, including the company’s stores in downtown Brooklyn, Union Square in San Francisco and State Street in Chicago, in addition to 35 mall-based stores and 10 distribution centers. The assets are valued at about $2.2 billion.. . . more

Boston Globe survey: One year before restaurants return to normal

Chain Store Age
A survey of 1,000 readers conducted by the Boston Globe found people bound into distinct groups on the question of when they’d feel comfortable dining out.

About one-third of respondents were eager to eat out, with 18% saying they’d return to restaurants as soon as possible and 13% back within a month after re-opening. Another 28% said they’d wait three to six months, while 22% would hold out for six to 12 months.

The survey found that fully one-fifth of Bostonians (19%) planned to stick with takeout and home cooking for at least a year after Massachusetts’ Phase 2 re-opening of bars and restaurants in June. . . more

Tuesday Morning retailer files Chapter 11 bankruptcy, plans 230 store closings

USA Today
Off-price retailer Tuesday Morning filed for Chapter 11 bankruptcy protection Wednesday with plans to close more than a third of its stores.

Tuesday Morning had been struggling when the coronavirus pandemic began and went into a free fall when it was forced to temporarily close its locations due to the crisis.

Tuesday Morning – which sells a wide variety of merchandise including home decor, bath and body goods, crafts, food, and toys – hopes to stay in business while using the bankruptcy process to restructure its operations. . . . more

Fitness Clubs Facing $10 Billion Revenue Hit as Members Flee

Fitness clubs rocked by Covid-19 closures face a swell of bankruptcies with more than $10 billion of revenue wiped out as clients ditch memberships, according to investment bank Harrison Co.

In a Harrison survey of 1,000 fitness club users, more than a third said they have canceled or plan to terminate existing memberships.

“There are 38,000 locations throughout the U.S., and about a third have a reasonably high probability of being shut down,” Paul Byrne, an investment banker at Harrison who was formerly president at elliptical-maker Precor, said in a Bloomberg Television interview. A large number are “probably not going to make it through this.” . . . more

A J.C. Penney REIT Is an ‘Odd Value Proposition’ in Today’s Climate. But its Stores Could Attract a Wealthy Buyer

Walloped by sagging sales and crippling debt, retailer J.C. Penney Co. Inc. wants to offload its real estate into a publicly-traded REIT as part of its Chapter 11 bankruptcy case. Some experts say this strategy could unlock the value of J.C. Penney’s properties and help it concentrate solely on selling apparel and other goods.

But will the REIT approach help keep the struggling department store chain in business?

Some observers are optimistic, hailing the proposed REIT as a smart move and a “pretty good bet.” Critics are dubious, calling the company-owned stores an “albatross” and labeling the REIT concept an “odd value proposition.”. . . more

TJX takes $187M in gov't funding to offset payroll; defers rent to FY 2022

Boston Business Journal
Framingham-based The TJX Cos. accepted a combined $187 million in government funding to offset payroll for its workers in North America and Europe, and is deferring rental payments for many of its 4,500 stores until fiscal 2022, the discount retail giant disclosed in a securities filing this week.

TJX is the parent company of T.J. Maxx, Marshalls and HomeGoods, and has a global workforce of 270,000. It employs about 17,000 in Massachusetts. . . . more

Distressed real estate market beckons opportunistic buyers

Boston Business Journal
Hoping to take advantage of wreckage in the wake of the coronavirus pandemic, investors are preparing to snap up commercial real estate at rock-bottom prices.

Long before states and cities closed businesses and issued stay-at-home orders, many real estate funds were stockpiling cash and waiting for a buyer’s market. Some have raised billions of dollars in the last several weeks.. . . more

Tuesday, May 26, 2020

U.S. consumer confidence edges up in May

Yahoo Finance
U.S. consumer confidence nudged up in May, suggesting the worst of the novel coronavirus-driven economic slump was probably in the past as the country starts to reopen, but it would probably take a while to fully dig out of the hole amid record unemployment.

The Conference Board said on Tuesday its consumer confidence index edged up to a reading of 86.6 this month from a downwardly revised 85.7 in April.. . . more

PREIT CEO thinks J.C. Penney can stay alive with a scaled-down format

Chain Store Age
PREIT CEO Joseph Coradino, who several years ago began buying back department store space in the company’s malls and filling them with more viable retail concepts, now thinks we may not have seen the last of J.C. Penney.

“We were encouraged to see they worked through their Sephora issues and believe there is a place for a scaled-down Penney’s, so we look forward to working with them,” Coradino said during PREIT’s first-quarter earnings call on Thursday. . . . more

Will anyone save Stage Stores from retail oblivion?

Retail Dive
In late November, as Stage Stores CEO Michael Glazer took the phone on a conference call with investors, he said that he had been looking forward to the call "because I want to share with you the incredible excitement that is going on here at Stage Stores."

The retailer indeed had plenty to brag about. During the third quarter the company set records across its financial metrics and posted a comparable sales gain of 17%. . . . more

AutoZone Q3 tops Street amid ‘most extreme fluctuations’ in sales in its history

Chain Store Age
AutoZone, whose stores remained open during the pandemic, reported third-quarter profit and sales that easily beat expectations helped by stimulus checks that fueled sales late in the quarter.

Net income fell to $342.9 million for the quarter ended May 9, from $405.9 million in the year-ago period.

Sales inched down 0.1% to $2.779, beating estimates of $2.69 billion. Domestic same-store sales fell 1.0%. . . . more

REI partners with West Elm for the summer

Chain Store Age
For the first time in its 82-year history, REI will sell its product through another retailer.

The outdoor specialty co-op has teamed up with home furnishings company West Elm on a co-curated collection, called REI x West Elm, of lifestyle products designed to help people feel at home while in the outdoors. . . . more

Saks’s Owner Denies Claim It Stripped Assets in Reorganization

Saks Fifth Avenue owner Hudson’s Bay denied allegations in a lawsuit that an internal restructuring amounted to a move to strip the company of its assets and impair collateral for a loan to subsidiaries of a real estate joint venture.

In a memo filed Saturday in New York in response to the lawsuit by U.S. lenders, the company called it “a transparent attempt to gain leverage in negotiations” with the borrowers, who are landlords of 34 Saks and Lord & Taylor stores. Owned by a Hudson’s Bay joint venture, they defaulted on $7.4 million of payments of a $846 million loan as retailers stopped paying rent after the coronavirus pandemic forced them to close, according to the document.. . . more

Amazon, Costco have ‘most favorable’ COVID-19 response, shoppers say

Supermarket News
Shoppers named Amazon, Costco Wholesale, Walmart, Publix and Kroger as the top retailers in terms of their response to the coronavirus pandemic, according to consumer market research firm Magid.

Amazon led all food retailers, with 30% more customers saying they feel more favorable about the online retail giant’s COVID-19 response than those who feel less favorable about its efforts, the May 2020 Magid Food & Beverage Consumer Insights Tracker, which polled 1,000 shoppers. The only other retailers with a more favorable differential of at least 20% were Costco (+25%), Walmart (+22%), Publix (+21%) and Kroger (+21%).. . . more

Friday, May 22, 2020

The coronavirus is crushing bankrupt retailers’ hopes for a rebound – and threatening even more jobs

Bankruptcy doesn’t need to mean the end of a company. It can be a shot to shed debt, reorganize and come out stronger.

But during the coronavirus pandemic, bankruptcy filings are increasingly spelling doom for retailers. In turn, it threatens thousands of more workers in an economy that has already suffered tens of millions of lost jobs. . . . more

Biggest U.S. Mall Is Two Months Delinquent on $1.4 Billion Loan

The Mall of America, the largest U.S. shopping center, missed two months of payments for a $1.4 billion commercial mortgage-backed security, the latest sign of the devastating impact of pandemic-related shutdowns on the retail industry.

“The loan is currently due for the April and May payments,” according to a report filed by the trustee of the debt, Wells Fargo & Co., which is also the master servicer for the loan. “Borrower has notified master servicer of Covid-19 related hardships.” . . . more

Foot Locker swings to Q1 loss; phased store reopening underway

Chain Store Age
Foot Locker reported a much wider-than-expected fiscal first-quarter loss as its stores went dark during the pandemic and is temporarily suspending its cash dividend.

The athletic shoe and accessories retailer swung to a net loss of $98 million for the quarter ended May 2, from net income of $172 million in the year-ago period. 

Sales dropped 43% to $1.18 billion, below estimates of $1.36 billion. Comparable-store sales decreased 42.8%. . . . more

Bed Bath & Beyond to reopen 600 stores by June 13; expanding contactless curbside pickup

Chain Store Age
Bed Bath & Beyond Inc. is getting ready to welcome back customers to its stores amid surging digital sales.

The home goods retailer said it plans reopen 600 stores, including about 500 Bed Bath & Beyond locations across North America, along with 50 Christmas Tree Shop stores and 50 Cost Plus World Market stores in the U.S. The re-opened stores will follow the company’s store safety plan, which includes social distancing measures, enhanced cleaning and occupancy limits. . . . more

Americans splurge at Walmart, Target as stimulus checks kick in

Yahoo Finance
The Trump Administration's coronavirus relief payment provided a fillip to sales of major retailers in April as millions of Americans used the money to buy everything from video games to sewing machines even as the country struggles with record job losses.

Walmart and Target Corp noted in their earnings call this week that quarterly comparable sales, which rose about 10%, got a major boost from increased demand for non-essentials at the end of last month.

"Call it relief spending, as it was heavily influenced by stimulus dollars," Walmart Chief Executive Doug McMillon said on Tuesday, citing a jump in sales of clothing, televisions, video games, sporting goods and toys. . . . more

Mass. unemployment rate hit 15% in April

Boston Business Journal
The state’s unemployment rate rose to 15.1% in April after Massachusetts lost an estimated 623,000 jobs in a single month due to the Covid-19 pandemic, according to data published Friday.

The rate is the highest on record in Massachusetts, according to an Executive Office of Labor and Workforce Development database that dates back to 1976. The previous high during that time frame had been 10.3%, in January 1976. . . . more

TJX aims to have all stores open by end of June

Boston Business Journal
TJX Cos. has started reopening many of its stores worldwide, and anticipates that most of its stores could be open by the end of June, the Framingham-based parent company of T.J. Maxx, Marshalls and HomeGoods reported to the SEC on Thursday.

In mid-March, TJX closed stores in nine countries, as well as online shopping sites, distribution centers and offices around the world, amid the global coronavirus pandemic. The company furloughed its store and distribution center employees in North America after April 11, and reduced the base salaries of CEO Ernie Herrman and Executive Chairman Carol Meyrowitz by 30% between April 12 and July 4. . . . more

Thursday, May 21, 2020

Best Buy earnings, sales fall but beat Street as digital sales skyrocket

Chain Store Age
Best Buy Co. reported first-quarter earnings and sales that beat analyst expectations amid a 155% rise in online sales as customers took advantage of curbside pickup at its stores.

In the middle of the quarter, March 22, the consumer electronics giant shifted all its stores to a curbside-only operating mode, which allowed customers to purchase items online or via the Best Buy app and request pickup at their local Best Buy. . . . more

BJ’s Q1 same-store sales jump a record 27%

Chain Store Age
BJ's Wholesale Club reported profit and sales that topped analyst expectations amid surging online sales and a spike in new members during the pandemic.

The membership-based warehouse retailer reported that its total revenue increased 20.8% to $3.80 billion for the quarter ended May 2, above estimates of $3.32 billion, as net sales rose 21.1% and membership fee income increased 8.4%. . . . more

How Much Further Could U.S. Retail Rents Drop?

Even more turmoil lies ahead for the U.S. retail sector as effective retail rents are projected to plunge 11.00 percent in 2020, according to Moody’s Analytics recent market forecast.

This drop would be nearly twice the decline in retail rents that occurred following the Great Recession of 2008. It will also make retail the hardest-hit commercial real estate sector, Moody’s Analytics pointed out.. . . more

Victoria's Secret to close about 250 stores in the U.S. and Canada, Bath & Body Works to close 50

USA Today
Victoria’s Secret plans to permanently close approximately 250 stores in the U.S. and Canada in 2020, its parent company L Brands announced Wednesday.

L Brands also plans to permanently close 50 Bath & Body Works stores in the U.S. and one in Canada, according to information the company posted online as part of its quarterly earnings. L Brands will discuss its earnings with analysts Thursday morning.

L Brands' total company sales declined 37% in the quarter that ended May 2. Almost all of the company’s stores have been closed since March 17 due to the COVID-19 pandemic. . . . more

Macy's warns of up to $1 billion quarterly loss due to lockdowns

Macy’s Inc said on Thursday it could rack up operating losses of up to $1.11 billion in the first quarter, as the department store operator was forced to shut stores due to lockdowns aimed at curbing the spread of the new coronavirus.

The health crisis has forced brick-and-mortar retailers to tap credit lines, lay off employees and suspend dividends and buybacks in a bid to stay afloat amid store closures. . . . more

Nearly 39 million have sought US jobless aid since coronavirus hit

Boston Herald
More than 2.4 million people applied for U.S. unemployment benefits last week in the latest wave of layoffs from the viral outbreak that triggered widespread business shutdowns two months ago and sent the economy into a deep recession.

Roughly 38.6 million people have now filed for jobless aid since the coronavirus forced millions of businesses to close their doors and shrink their workforces, the Labor Department said Thursday.

The number of weekly applications has slowed for seven straight weeks, and last week the figures declined in 38 states and the District of Columbia. Yet historically, they remain immense — roughly 10 times the typical figure that prevailed before the virus struck. . . . more

Pier 1 Imports, with 7 Mass. locations, plans to close all stores

Boston Business Journal
Pier 1 plans to start store closing efforts and liquidation sales once store locations can reopen in compliance with coronavirus guidelines from local government and health officials. The company is currently continuing to serve customers through its website, and orders are being processed and filled.

The home decor chain has 540 stores, including seven Massachusetts locations. There are Pier 1 stores in Hanover, Norwood, Woburn, Danvers, Bellingham, Shrewsbury and North Dartmouth. Two locations are near the New Hampshire-Massachusetts border, in Salem and Nashua. . . . more

Wednesday, May 20, 2020

Olive Garden parent Darden Restaurants expects some dine-in capacity at 65% of restaurants by end of May

Nation's Restaurant News
Darden Restaurants Inc., parent to the Olive Garden and LongHorn Steakhouse casual-dining brands, expects to have 65% of its 1,800 restaurants open for some dine-in service by the end of May as coronavirus restrictions ease further across the nation, the company said Tuesday.

The Orlando, Fla.-based company said same-store sales for the fourth quarter, which started Feb. 24, through May 17 had declined 47.9% amid the COVID-19 pandemic restrictions.. . . more

Target's 141% digital growth during pandemic pushes sales and costs up

Retail Dive
In a first quarter defined by the new coronavirus, Target's comparable sales rose 10.8%, the company said in a press release.

Digital sales, which rose a whopping 141%, accounted for 9.9 percentage points of that comp expansion. Helping to drive that figure were Target's same-day services — pick up, drive up and Shipt — which grew 278% in Q1.. . . more

Ch. 11 is J.C. Penney's best shot at a turnaround, but it's not a sure one

Retail Dive
Since filing for bankruptcy, J.C. Penney executives have painted a picture of a hobbled retailer that was on the mend before the COVID-19 crisis hit.

"Before the pandemic, the Company had a substantial liquidity cushion, was improving its operations, and was proactively engaging with creditors to deleverage its capital structure and extend its debt maturities to build a healthier balance sheet," CFO Bill Wafford said in court papers. "Unfortunately, that progress was wiped out with the onset of COVID-19.". . . more

Poag CEO: Our lifestyle centers are ready to thrive in the post-COVID-19 world

Chain Store Age
As the COVID-19 related shutdowns began to wind down in Texas and Georgia, Poag Shopping Centers’ lifestyle centers were among the first to welcome back guests. As we watched them shop our retailers, enjoy freshly prepared meals, and stroll our grounds, we saw expressions of relief and hope, happiness and joy. It was clear that what was true before the pandemic will be true after: Brick-and-mortar is the most important channel for retailers.

There were lines at some retailers and extended waits at the restaurants. We set up additional tables in our public green spaces so that those not wanting to wait or eat inside could order takeout and eat on the property. Our level of cleaning has gone up dramatically. These are actions many more operators will be taking as more states open though, to be sure, different regions of the country will have different regulations. . . . more

Lowe's Smashes Q1 Earnings Forecast as Digital Sales Surge

The Street
Lowe's Companies posted stronger-than-expected first-quarter earnings Wednesday and said its solid performance continued this month, as big retailers that remained open during the peak of the coronavirus pandemic continue to book big top and bottom-line gains.

Lowe's said adjusted earnings for the three months ending on May 1 were up 45% from the same period last year. Group revenues, Lowe's said, rose 11% to a forecast-beating $19.7 billion, with same-store sales in the U.S. rising 12.3% and digital sales surging by around 80%.. . . more

Kohl’s CEO says this is the ‘low point’ of 2020, as margins take a hit from coronavirus

Kohl’s Chief Executive Michelle Gass anticipates the worst is behind her business, as the retailer reported a quarterly net loss on Tuesday, hit hard by the coronavirus pandemic.

“I think this is the low point of the year,” Gass said in a phone interview. “For half the quarter, our stores had no sales.” . . . more

J.C. Penney to reopen 153 stores as clock is threatening its bankruptcy reorganization

The Dallas Morning News
J.C. Penney is reopening stores in Texas, Florida, Indiana and Ohio on Wednesday as the clock is ticking in its bankruptcy, the largest so far since the coronavirus pandemic shutdown the economy.

As Penney enters its first week of bankruptcy, details have emerged of its difficult path for exiting Chapter 11. The company will attempt to spin off of its real estate into a separate company and permanently close stores while it’s still trying to reopen locations.. . . more

Tuesday, May 19, 2020

Facebook Survey Shows 31% of Small Businesses Stopped Operating

One-third of U.S. small businesses have stopped operating, while another 11% expect to fail in the next three months if Covid-19 conditions persist, according to an April survey.

“The numbers are devastating,” said Sheryl Sandberg, the chief operating officer of Facebook Inc., which helped conduct the survey of 86,000 business owners and employees, in partnership with the Small Business Roundtable.. . . . more

Report has Amazon in talks with J.C. Penney; bankrupt chain to close 242 stores

Chain Store Age
Amazon is said to be a contender for either all or parts of J.C. Penney, according to an exclusive report by WWD.

“There is an Amazon team in Plano [Tex.] as we speak,” said one source who does business with the online giant, reported WWD. “There is a dialogue and I’m told it has a lot to do with Amazon eager to expand its apparel business — for sure.”. . . more

Pier 1 Imports to liquidate as soon as it can get its stores open

The Dallas Morning News
Pier 1 Imports, one of the original home furnishing stores that expanded throughout the U.S. starting in the 1960s, is liquidating its business as soon as it can get its stores open again.

The Fort Worth-based home furnishings retailer filed for bankruptcy in February and was trying to reorganize with around about 450 stores or find a buyer who would keep the business alive.

The coronavirus pandemic dashed those hopes. . . . more

Retail sales in the US could fall more than 6% in 2020

There are still so many unknowns regarding the coronavirus pandemic and how it will continue to throttle the retail industry.

But U.S. retail sales could be down at least 6.5% in 2020, according to new estimates from market research company Euromonitor. For comparison, retail sales were down just 2.2% in 2009, the year the Great Recession finally came to a halt, according to the firm. And sales were up 3.3% year over year in 2019, it said. . . . more

Kohl's online sales surge amid lockdown, reopens about half of its stores

Yahoo Finance
Kohl's Corp reported a surge in online sales in its coronavirus-hit first quarter on Tuesday and said it had reopened nearly half its stores as lockdowns eased across the United States, sending its shares around 5% higher.

Kohl's was forced to close all its U.S. stores to curb the spread of the virus, hammering sales and sending shares in the retailer some 63% lower so far this year.

But the company said that online sales rose 24% overall in the quarter and more than 60% in April, dwarfing earlier growth as the chain limited operations to its app and website. . . . more

Home Depot Misses Q1 Earnings Forecast on Coronavirus Costs; Scraps 2020 Profit Outlook

The Street
Home Depot posted weaker-than-expected first-quarter earnings Tuesday while scrapping its 2020 profit guidance, as pre-tax costs to counter the coronavirus pandemic reached $850 million.

Home Depot said earnings for the three months ending in on May 3 were down 8.4% from the same period last year. Group revenues, Home Depot said, rose 7.3% from last year to $28.3 billion, topping analysts' forecasts of $27.53 billion tally.

Home Depot also suspended its full-year 2020 profit guidance, which had forecast comparable sales rising between 3.5% and 4.%. . . . more

Restaurants, retailers frustrated by lack of re-opening date

Boston Business Journal
Groups representing the state’s restaurants and retailers are voicing disappointment with the Baker administration’s plans to reopen their industries, including the continued uncertainty around when exactly they’ll be able to welcome in customers.

Gov. Charlie Baker said Monday that retailers and restaurants can begin opening their establishments to customers, with restrictions, in Phase 2 of the state’s four-phase plan for reopening Massachusetts. They can now offer take-out and delivery if they're a restaurant, or remote fulfillment if they're a retailer considered nonessential. . . . more

Monday, May 18, 2020

From touchless payments to 'quarantined' returns, the retail experience may be forever changed

NBC News
Eager shoppers will soon be able to browse their local retail stores as states continue to roll back stay-at-home orders. But instead of testing a swatch of lipsticks at a makeup counter or waiting in line to try on summer shorts, customers should expect “virtual try-on tools,” styling via app, shuttered fitting rooms, and returns that are quarantined for 72 hours.

Apple is the latest company to reopen stores, requiring face coverings for staff and customers, temperature checks at the door, conducting "health questions" to screen anyone with COVID-19 symptoms, and deep cleanings throughout the day. . . . more

Guitar Center makes debt payment, dodges default

Retail Dive
Guitar Center has addressed its April 2020 debt payments, reported to be late, through a series of transactions that had the support of the company’s lender groups, according to a Friday press release. The company said the transactions provided additional near-term liquidity to help it navigate the COVID-19 crisis.

"We believe that with these transactions and the staged reopening of the country along with our pre-pandemic positive business performance, we are well positioned to meet these challenging market conditions," Guitar Center CFO Tim Martin said in the release.. . . more

Who’s paying rent and who’s not? (Staples paid!)

Chain Store Age
News outlets reported in early April that Sycamore Partners refused to pay April rents for its Staples stores during the pandemic, even though the stores remained open. Not true. As May began, 82% of the month’s rents for Staples were in landlord’s hands.

That’s the actual payment rate determined by Datex, a supply chain software and management solutions provider. Its Tenant Track of more than 1,000 shopping centers and tens of thousands of retail stores found that only 42% of total retail rents had been collected by May 8—exactly half the total collected on that same date in 2019.. . . more

Children’s Place sales down 38% in Q1; reopening stores in 10 states

Chain Store Age
The Children’s Place is beginning to reopen its stores as the COVID-19 pandemic continues to take a toll on its revenue.

The nation’s largest pure-play children’s specialty apparel retailer said its sales fell 38% to $254 million in the quarter ended May 2. To help fulfill surging online demand, Children’s Place enabled its ship-from-store capabilities in approximately 85% of its U.S. stores in late April, which more than doubled its daily shipping capacity. The retailer said its seond quarter digital demand is up more than 400% through May 16. . . . more

Restaurant and bar owners say social distancing could wipe out their industry

The US state of Georgia allowed restaurants to reopen on April 27. The three owned by Ryan Pernice are still shuttered.

The entrepreneur hasn't opened his restaurants, Table & Main, Osteria Mattone and Coalition Food & Beverage, since March 16. Pernice is worried about the health of his employees and customers, but there's another reason the restaurants are still shut down: They can't make a profit with social distancing rules in place. . . . more

Apple details its plan to safely reopen retail stores

The Verge
Apple’s head of retail Deidre O’Brien has posted a letter on the company’s website detailing how it plans to safely restart operations at its retail stores. Apple shut all of its stores outside Greater China in March as COVID-19 spread worldwide; all the Greater China stores reopened that same month, while Apple is still in the process of taking careful steps elsewhere.

“Our commitment is to only move forward with a reopening once we’re confident we can safely return to serving customers from our stores,” O’Brien writes. “We look at every available piece of data — including local cases, near and long‑term trends, and guidance from national and local health officials. These are not decisions we rush into — and a store opening in no way means that we won’t take the preventative step of closing it again should local conditions warrant.”. . . more

Bankrupted JC Penney plans to spin its properties into separate real estate company

A piece of J.C. Penney’s proposal to emerge from bankruptcy includes spinning its real estate into a publicly traded real estate investment trust.

As part of a plan filed with the bankruptcy court, Penney would reorganize into a new retailer (“JCP”), along with a REIT that would collect rent checks from the retail business. Court documents say as much as a 35% stake in the newly created REIT could be sold to a third-party investor to raise cash, or to provide additional funding for the REIT. . . . more

Friday, May 15, 2020

Starbucks seeks rent relief for next 12 months

Chain Store Age
Starbucks is asking its landlords for a break on rent as COVID-19 takes a toll on sales.

In a letter to landlords that the coffee giant sent earlier the month, the company asked them to “adapt to new realities” — including an anticipated $225 billion hit to the American restaurant industry during the next three months, reported The Seattle Times.. . . more

Coronavirus Finishes the Retail Reckoning That Amazon Started

The Wall Street Journal hurt many retailers. Coronavirus will finish some of them off.

Roughly 100,000 stores are expected to close over the next five years—more than triple the number that shut during the previous recession—as e-commerce jumps to a quarter of U.S. retail sales from 15% last year, UBS estimates. The turbocharged shift to e-commerce is expected to further depress profit margins and accelerate a shakeout in a country that already had too much bricks-and-mortar space for an increasingly digital world.. . . more

IKEA's shopping malls arm Ingka Centres plans U.S. entry in major play

IKEA’s shopping malls business, one of the world’s biggest, is looking to enter the United States in the next couple of years and is in talks to snap up central properties in major cities, its boss told Reuters.

Gerard Groener, managing director of Ingka Centres, which has 45 shopping centres in Europe, Russia and China, said his company was in several negotiations for inner-city real estate. . . . more

One in 4 restaurants won't re-open after pandemic, study says

USA Today
Your favorite restaurant, now closed or only accepting take out orders due to the coronavirus, may never reopen, according to a top exec with reservation service OpenTable.

Steve Hafner, CEO of Booking Holdings’ OpenTable and travel site Kayak, told Bloomberg that one out of every four restaurants won't come back.

With most restaurants being closed or open for takeout only, reservations on OpenTable's services were down 95% on May 13 from the same day a year ago, said the report. . . . more

Retail sales plunge a record 16.4% in April, far worse than predicted

Consumer spending tumbled a record 16.4% in April as the backbone of the U.S. economy retrenched amid the coronavirus pandemic, according to a government report Friday.

Economists surveyed by Dow Jones expected the advanced retail sales number to fall 12.3% after March’s reported 8.3% dive already had set a record for data going back to 1992. The March numbers were revised to be not as bad as the 8.7% initially reported. . . . more

Coronavirus to keep Massachusetts casinos closed until ‘at least’ June 1

Boston Herald
Casino owners and the Massachusetts Gaming Commission say they aren’t going to roll the dice with a May opening under coronavirus, with the regulators extending the closure until “at least” June 1 and operators saying they don’t expect to open anytime soon.

The Gaming Commission unanimously voted to extend the temporary closure of the three casinos in the state through the end of the month, with Interim Executive Director Karen Wells saying that’s an “at-least’ date.”. . . more

Tempting back the terrified: shops and restaurants try to reassure customers

Boston Business Journal
A rotating conveyor belt that allows customers to help themselves to food and avoid contact with staff might seem the ideal set-up for a restaurant trying to operate under social distancing rules.

But Richard Hodgson, chief executive of the Yo! Sushi chain, said he would not reopen a single outlet until he could be sure diners would return. “Irrespective of what restrictions are lifted, we need to see what the customer sentiment is,” he said. “When you see someone in a face mask and perspex screens, it reminds you that there is a risk.”

While authorities on both sides of the Atlantic are beginning to loosen lockdowns, companies at the sharp end of dealing with the public know it will take more than changes in government advice to get business going again.. . . more

Thursday, May 14, 2020

Westfarms mall set to reopen on May 20, but not all stores will be open

Hartford Courant
Westfarms shopping center in West Hartford will reopen on May 20, mall officials said Wednesday, the first day retail stores and malls can operate following widespread business shutdown due to the coronavirus. But it’s unlikely all stores in the mall will open on the same day.

While the facility itself is opening on May 20, individual stores inside will open on a case-by-case basis. According to a spokesperson for Taubman Centers, which owns and operates Westfarms and malls around the country, the company is seeing an average of 30 to 50% of stores inside their malls reopening. Westfarms recommends customers call ahead to see if specific stores will be open.. . . more

J.C. Penney pays out nearly $10M to execs as finances falter

Retail Dive
J.C. Penney is paying out millions of dollars in performance bonuses to its top executives as its stock nears $0 and the retailer reportedly drifts toward bankruptcy.

In a recent securities filing, the company said its board had approved changes to its compensation program that include pre-paid cash incentive awards worth a fraction of executives' target variable compensation.. . . more

Is Curbside Pickup a Long-Term Strategy or Short-Term Fix?

As the COVID-19 pandemic continues to wreak havoc on the U.S. retail sector and alter the way people shop, big retail landlords are implementing curbside pickup programs to help their tenants ramp up sales as the economy begins to reopen.

Kimco Realty Corp. and Federal Realty Investment Trust are two large shopping center owners designating curbside pickup areas at their centers for essential retailers that are currently open and non-essential retailers that will reopen as government restrictions are eased. . . . more

LL Bean reopens two of its Freeport retail stores

BDN Business
L.L. Bean became the latest retailer to partially reopen its stores Wednesday after it had closed all of them on March 16 to help curtail the spread of the novel coronavirus.

The iconic Maine outdoors goods company, which began a slow reopening last week with curbside pickup at most of its Freeport stores, has opened its Bike, Boat & Ski and Hunting & Fishing stores in downtown Freeport, it told customers in an email Wednesday. . . . more

Weekly jobless claims total 2.981 million, bringing coronavirus tally to 36.5 million

New filings for unemployment claims totaled just shy of 3 million for the most recent reporting period, a number that while still high declined for the sixth straight week, according to Labor Department figures Thursday.

The total 2.981 million new claims for unemployment insurance filed last week brought the coronavirus crisis total to nearly 36.5 million, by far the biggest loss in U.S. history. The count announced last week count was revised up by 7,000 to 3.176 million, putting the weekly decline at 195,000 between the two most recent reports. . . . more

Americans keep clicking to buy, minting new e-commerce winners

Boston Business Journal
Online sales in the United States have surged in recent weeks, after shelter-in-place measures enacted in March shuttered brick-and-mortar stores throughout the country.

While the shutdowns immediately altered how people spent their money, the patterns have continued to shift as the weeks have gone on, new data shows, shaped by waves of panic buying and even payouts of government aid. The latest bump in online spending came after the government sent out stimulus payments to tens of millions of American households beginning on April 11.

Beyond what might be temporary shifts, consumer habits appear to be changing in ways that may well endure beyond the pandemic and determine who will become the most important online players. . . . more

Why a 10% plunge in spending is good news

Yahoo Finance
When activity collapses in an economic crisis, before you can talk about a recovery you must first slow the rate of declines.

And so good news, relatively speaking, becomes characterized by a deceleration in the deterioration. You may recognize this from calculus class as a turn in the second derivative.

This is exactly what Bank of America’s credit and debit card activity has started to show.. . . more

Wednesday, May 13, 2020

As states grapple with reopening, retail industry thinks it has a 'blueprint'

Retail Dive
Retail as an industry is planning for its reopening. Waiting for it is a patchwork of states with different governments, different rules and different rates of infection from COVID-19.

According to a recent poll, 66% of Americans don't think their states should reopen retail stores yet. Many are beginning the re-opening process anyway. . . . more

Expert Insight: The ‘New Next’ for Retail

Chain Store Age
In early 2020, retail was predictable.

Clothes were neatly stacked on shelves and displayed on mannequins, shoppers browsed in search of just the right item, and online orders came into the warehouse and awaited fulfillment. Then COVID-19 hit, and a new reality emerged.

Stores closed and workers and consumers were sheltering at home, leaving fashion and specialty retail footfall at a near standstill. Meanwhile, the demand for essential goods and services, including groceries, accelerated at an unprecedented rate that challenged the supply chain. . . . more

“Czech sphinx” makes big bet on Macy’s

The Real Deal
Czech billionaire Daniel Kretinsky has acquired a 5-percent stake in Macy’s, with plans to work with management to turn around the struggling retailer as it prepares to reopen its stores.

Kretinsky, who has a net worth of about $3.4 billion and recovered from a coronavirus infection in March, is known as “Czech sphinx” for his inscrutable demeanor. He first built his fortune in the energy business, and his Energetický a průmyslový holding is now one of central Europe’s largest power companies. . . more

Massachusetts businesses hoping for May 18 end to coronavirus shutdown can wait for answers: Charlie Baker

Boston Herald
There are more questions than answers for Massachusetts businesses hoping to reopen next week — but won’t know if they will be allowed to unlock their doors until Monday, when Gov. Charlie Baker’s order banning non-essential business operations is slated to expire.

“The folks that are most likely to be able to operate successfully on the 18th are going to be many of the folks that are currently operating — the essential businesses,” Baker said, speaking after a tour of MatTek life sciences lab in Ashland on Tuesday.

“The second group that’s likely to come up earliest are going to be people who work in ways and in spaces that don’t have a lot of face-to-face interaction with customers as part of their regular business,” Baker said. . . . more

Neiman Marcus creditor calls for deal with Saks Fifth Avenue

Hedge fund Mudrick Capital Management LP asked Neiman Marcus Group’s independent directors on Tuesday to explore a combination with rival department store chain Saks Fifth Avenue, challenging the company’s plan to reorganize under bankruptcy protection.

A lawyer for Mudrick, which holds portions of Neiman Marcus’s roughly $5 billion of debt, wrote in a letter to the directors that a sale or merger with Saks would result in better financial recoveries for creditors than the company’s current plan to restructure and hand control to senior lenders.. . . more

J.C. Penney Nearing $450 Million Funding to Navigate Bankruptcy

The Street
J.C. Penney reportedly is close to securing $450 million in funding that it will use to navigate a possible bankruptcy filing, marking what would be the third major U.S. retailer to fall victim to the coronavirus pandemic and ongoing economic shutdown.

Citing people familiar with the matter, the retailer is planning to file for bankruptcy as soon as this Friday, CNBC reported, though that timing could still be delayed. The company is considering closing 180 to 200 stores while in bankruptcy. . . . more

Retail stores reopening as coronavirus lockdowns lift

Yahoo Finance
U.S. retailers are slowly reopening after the coronavirus forced them to shutter.

As the U.S. emerges from over a month-long lockdown, in which states and municipalities prohibited all but essential businesses from operating, retailers aim to recover from pandemic-related losses. Retail sales dropped 8.7% in March, the largest monthly dip ever recorded. Now, although some states like New York and California are still shut down, most of the U.S. has partially reopened. . . . more

Tuesday, May 12, 2020

GNC says Ch. 11 is a possibility as pandemic hits sales and profits

Retail Dive
Nutrition supplement retailer GNC has been battered by the coronavirus pandemic, with its comparable sales down 10.1% in the first quarter, the company reported.

The company recorded a $157.5 million asset impairment related to disruption from COVID-19. That led to a net loss of $200.1 million for Q1, wider by more than 1200% than its net loss from the prior year.. . . more

Scarred and Scared, the Reshaping of American Consumers Begins

Even with the rosy assumption that the Covid-19 virus will be contained in the coming weeks, the U.S. economy is in for a slow and painful struggle back from this devastating public health crisis.

Consumers drive 70% of U.S. gross domestic product and they’ve been dealt multiple blows. For some it’s a direct hit to their bank account. For others it’s a shot to their psyches as earners, spenders and social animals.. . . more

How Will Food Halls Fare Post COVID-19?

Food halls will struggle as states reopen businesses and some may close permanently, say industry sources. Over the long term, however, they should return to their pre-COVID-19 success.

Before the virus hit, there were approximately 226 food halls operating in the U.S., according to Phil Colicchio, executive managing director of Colicchio Consulting, the specialty food and beverage, hospitality and entertainment group at Cushman & Wakefield . . . more

Bed Bath & Beyond’s digital pivot continues; most stores won’t reopen before June

Chain Store Age
Bed Bath & Beyond continues to expand its fulfilment capabilities and omnichannel offerings to support increased demand across its digital channels and is also making plans to gradually reopen its stores.

The company, which expects the majority of stores across its banners to remain closed until at least May 30, 2020, is expanding buy-online-pickup-in-store and contactless curbside pickup services to at least 200 additional stores, for a total of 750 stores, or approximately 50% of its store fleet across the U.S. and Canada . . . more

Online grocery sales to grow 40% in 2020

Supermarket News
U.S. online grocery sales grew 22% in 2019 and, propelled by high demand from nationwide COVID-19 lockdowns, stand to surge about 40% this year, according to the Coresight Research U.S. Online Grocery Survey 2020.

Of 1,152 consumers polled, 52% had bought groceries online in the past 12 months — the first time that more than half of respondents had done so and representing more than double the number of shoppers from two years ago, Coresight said. E-commerce accounted for roughly 2.6% of U.S. food and beverage retail sales in 2019, but the projected growth in online grocery activity would raise that sales percentage to 3.5%, or nearly $38 billion. . . . more

Steak n Shake permanently closes 57 restaurants amid dismal first quarter

Indianapolis-based Steak n Shake, already struggling before the COVID-19 pandemic, closed 57 restaurants in the first quarter—a stretch when it posted a nearly $11 million operating loss.

With its restaurants limited to drive-thru, takeout or delivery nationwide for much of March because of the virus outbreak, the burger chain saw quarterly revenue plummet by $59 million, or 35%, compared with the year-ago period, parent Biglari Holdings Inc. reported late Friday.. . . more

Simon Property Wants to Reopen Malls, but Gets Stymied by Political Opposition

The Wall Street Journal
Simon Property Group is trying to open many malls as soon as it can, but some local politicians are stalling efforts to get many of them back in business.

In the past two weeks, the Indianapolis-based company had to backpedal on plans for reopening some of its properties in Indiana and New York, after local officials—especially in areas harder hit by the coronavirus—said it was too soon to allow people into malls. . . . more

Monday, May 11, 2020

Retail jobs fall by 2.1M in April

Retail Dive
In a report that several analysts noted hasn't been so bleak since the Great Depression, the Department of Labor said​ Friday​ that the U.S. lost 20.5 million non-farm jobs in April, pushing the unemployment rate to 14.7%.

The number of retail jobs fell by 2.1 million, with 740,000 out of work at clothing and clothing accessories stores and 209,000 at furniture and home furnishings stores, according to the report, released by the Bureau of Labor Statistics. General merchandise stores, which include warehouse clubs and supercenters, actually gained 93,000 jobs, the government said.. . . more

J.C. Penney misses another debt payment as potential bankruptcy looms

Retail Dive
J.C. Penney has missed another payment on its debt, this one a $17 million interest payment on its senior secured loan facility due May 7, the company disclosed last week. Penney has a grace period of five days before it is in default, which the retailer said it is using "to evaluate certain strategic alternatives, none of which have been implemented at this time."

Reuters reported Friday that Penney could file for bankruptcy as soon as this week with plans to close around 200 stores.. . . more

Genesco reopening Journeys, Johnston & Murphy stores

Chain Store Age
Genesco Inc. has begun reopening its store banners.

The footwear and accessories retailer said it has reopened more than 300 Journeys stores and anticipates reopening more than 400 stores by the end of May. Genesco’s Johnston & Murphy division will begin its initial phase of store reopenings with up to 30 locations reopening this week, an additional 40 locations next week, and a more aggressive schedule to follow. The company said it expects many more openings in June. . . . more

Rent Obligations on Retail Space in the Midst of a Pandemic: A Path Forward for Landlords and Tenants

The National Law Review
Business conditions in the wake of the COVID-19 pandemic are deteriorating so rapidly and on so many levels for retailers and shopping center owners in the U.S. that it would be economic suicide for landlords and their tenants to simply retreat to their corners and take intractable positions.

Retail landlords should not be taking an across-the-portfolio “pay your rent or else” response to tenant requests or demands for rent relief, without any regard for asset or tenant-specific conditions or any concern that half the country’s retailers have cash-burn rates that could lead to insolvency within a matter of months in the absence of shared, collective sacrifice by creditors – necessarily including landlords.. . . more

Retail stores can reopen in 12 of 16 Maine counties today

News Center Maine
Governor Janet Mills announced the revision to her phased reopening of Maine Friday.

Mills said 12 mostly rural counties can begin the reopening process because there is no evidence of community transmission of the coronavirus and because there is a lower number of confirmed cases of COVID-19.

The stores must follow CDC safety guidelines to reopen. The guidelines include employees being required to wear face coverings, ensuring social distancing between staff and customers, and limiting the number of customers inside the establishment, among others. . . . more

A Look at What the COVID-19 Crisis Has Been Like for One Retail Landlord

“What do we do about tenants asking for rent relief?” “How can we make sure that when we reopen, we can do so safely?” “How many of our retailers will be left standing when the COVID-19 crisis is over?”

These are questions that are now painfully familiar to retail center owners around the country.

But as some states begin to loosen stay-at-home restrictions and others move to fully reopen, retail landlords have to find viable ways to solve these issues. . . . more

Stage Stores Files for Bankruptcy, Seeks Buyer as It Sells Off Inventory

Stage Stores Inc., the owner of rural department and discount stores including Goody’s, Peebles and Gordmans, filed for bankruptcy protection, adding to the toll of traditional retailers felled by too much debt and the economic shocks of the coronavirus.

The retailer will simultaneously seek buyers for parts or all of its business while it also begins to wind down operations, Stage Stores said in a statement late Sunday. It will start reopening stores that have been closed by the pandemic, with about 557 outlets scheduled to open May 15 to conduct liquidation sales. . . . more

Friday, May 8, 2020

Bodybuilding Favorite Gold’s Gym Files For Chapter 11 Bankruptcy Protection

Gold’s Gym, made famous by 1977 bodybuilding documentary Pumping Iron, starring Arnold Schwarzenegger, is the latest firm to declare bankruptcy as it buckles under the economic toll of coronavirus shutdowns that have forced fitness fanatics to stay at home.

Gold’s Gym filed on Monday for Chapter 11 bankruptcy, with at least 30 company-owned gyms set to close. The business was founded by Joe Gold in 1965.. . . more

Staffing in a pandemic: Which retailers have furloughed, laid off or hired employees

Retail Dive
One of the largest impacts of the coronavirus pandemic, aside from temporary store closures, has been the furlough of store associates and — in some cases — corporate staff and distribution center employees.

As stores remain closed to customers in many parts of the country, retailers are generating significantly less revenue than they’re accustomed to, forcing them to fall back on credit lines, negotiate with landlords on rent, work with suppliers to push out orders and payments and, in some cases, file for bankruptcy protection. . . . more

Aldo Files for Bankruptcy Protection, Cites Deep Coronavirus Impact

Footwear News
The Aldo Group Inc. is the latest company to seek bankruptcy protection.

The Montreal-based retailer, founded in 1972, today announced that it has sought and obtained an initial order pursuant to the Companies’ Creditors Arrangement Act from the Superior Court of Québec. Aldo said it has “voluntarily” filed for “similar protection” in the United States — Chapter 15 bankruptcy — and is preparing to do the same in Switzerland. . . . more

Macy's delays first-quarter results to July 1, citing COVID-19 disruption

Department store chain Macy’s Inc on Thursday delayed its first-quarter earnings report to July 1, citing significant business disruption due to the COVID-19 pandemic, which has also led to delay in financial statement preparation.

Macy’s, like many retailers, has had to close its stores, furlough employees, suspend dividend and tap into credit facilities to survive the financial hit caused by the lockdowns. . . . more

J.C. Penney misses another big interest payment but makes up with beauty partner Sephora

Dallas Morning News
J.C. Penney said it will not make a $17 million interest payment that’s due Thursday on its senior secured term loan. Under its loan agreement, Penney has a grace period of five business days to make the payment before the company is in default.

Penney put another skirmish to bed late Thursday. The retailer was scheduled to meet Sephora in U.S. District Court in Sherman on Friday. Instead, the two companies said they “reaffirmed” their 14-year partnership to operate Sephora shops inside more than 650 Penney stores. . . . more

A new bailout fund for retailers — this time from a big landlord

Boston Business Journal
Brookfield Asset Management, the Canadian investment group that is one of the largest operators of US shopping malls, is launching a $5bn rescue fund for retailers that need extra capital to weather the coronavirus pandemic.

It represents a significant commitment of capital to a sector that was contending with major changes in shopping habits even before governments shut shops and prompted nervous debate among retail executives about how soon customers would return. . . . more

When will restaurants and bars reopen? Here’s what experts are saying

Restaurants and bars have been among the hardest-hit businesses during coronavirus quarantines. While some establishments will reopen with limited capacity sooner rather than later, the sector is likely to face widespread decimation, according to industry and health experts.

The National Restaurant Association projected the industry would take in $899 billion in sales in 2020 before coronavirus quarantines swept across the country. But most depend on consistent cash flow to keep their doors open and people employed. . . . more

Thursday, May 7, 2020

Kohl’s: About 25% of stores open by next week

Chain Store Age
Kohl’s Corp. is the latest retailer to announce significant changes to its stores as it begins to reopen locations that were shuttered during the pandemic.

In what it called a “phased approach, the department store company opened stores in four states — Arkansas, Oklahoma, South Carolina, and Utah — earlier this week. It plans to open stores in 10 additional states on Monday, May 11. The new states include Alabama, Alaska, Arizona, Georgia, Idaho, Mississippi, Montana and Texas, as well as Florida and Tennessee where a majority of Kohl’s stores will open. . . . more

Neiman Marcus files for bankruptcy

Chain Store Age
In a move that was not unexpected, Neiman Marcus Group has filed for bankruptcy with an agreement that will eliminate about $4 billion of its debt and make its creditors the majority owners of its business.

Burdened with crushing debt and with its stores closed due to COVID-19, the luxury department store company is the second major retailer to file for bankruptcy during the pandemic, following a filing by J.Crew Group last week. . . . more

How J. Crew's bankruptcy sets the stage for a 'shakeout' in retail

Retail Dive
J. Crew is the first in what may be a large and unfortunate class in the retail industry.

The COVID-19 crisis has shuttered tens of thousands of stores around the country, and forced even relatively healthy companies into crisis mode, scrambling for cash and making painful choices about whether to pay employees, landlords and suppliers.

J. Crew belongs to a group of retailers that were already on the edge. It had unsustainable debt, instability in the C-suite, tens of millions of dollars in losses, and sales declines in its namesake banner so deep that some years it dragged down sales for the entire company. . . . more

What Department Stores Will Be Left Standing After COVID-19?

The U.S. department store sector was in a downward spiral even before the COVID-19 pandemic hit as it faced declining foot traffic and falling sales.

Now the health crisis and its mandated shutdowns and social distancing—not to mention a deep looming recession—may put the final nail in the coffin for some department store retailers.

While some non-essential retailers are beginning to reopen in states easing their stay-at-home orders, experts say the pandemic will accelerate the decline of many department stores and the malls where they’re located.. . . more

Retail foot traffic ticks up as states loosen rules

Foot traffic to U.S. retail locations ticked up last week as more states relaxed restrictions imposed to fight the spread of the coronavirus, according to cellphone tracking information provided by data firm Unacast.

The company estimated here there were an average of 192 million visits daily to retail locations for the week through Sunday, May 3, compared with 167 million the week before, a nearly 15% increase.

The number remains more than 40% below estimates of retail foot traffic from the year before. . . . more

Gap sued over unpaid rent at Midtown Manhattan store
In another sign of the stress faced by retailers whose stores are shuttered by the coronavirus outbreak, Gap Inc. quit paying rent for its store near New York City’s Times Square, according to a lawsuit.

The landlord of the Gap store at 1212 Avenue of the Americas says the apparel giant failed to pay rent for April and May, along with water charges and snow removal, leaving the company with an unpaid bill of $530,334.. . . more

Costco’s Sales Fall for First Time in Over a Decade

The Wall Street Journal
Costco Wholesale Corp.’s monthly sales fell for the first time since the recession, as stay-at home orders and social-distancing restrictions reduced shopper traffic and some parts of stores offered limited service.

Comparable sales, those from stores and digital channels operating for at least 12 months, fell 0.5%, excluding the impact of gasoline and currency fluctuations, for the four weeks ended May 3. Including those items, sales fell 4.7% as low gas prices further pushed sales down. . . . more

33 million have sought US unemployment aid since coronavirus hit

Boston Herald
Nearly 3.2 million laid-off workers applied for unemployment benefits last week as the business shutdowns caused by the viral outbreak deepened the worst U.S. economic catastrophe in decades.

Roughly 33.5 million people have now filed for jobless aid in the seven weeks since the coronavirus began forcing millions of companies to close their doors and slash their workforces. That is the equivalent of one in five Americans who had been employed back in February, when the unemployment rate had reached a 50-year low of just 3.5%.. . . more

Small step, big help as governor opens doors for business

Boston Business Journal
This week, Gov. Charlie Baker took action to ease the strict shutdown measures Massachusetts businesses have been living with for weeks when he agreed to allow non-essential businesses to bring in a few employees to their stores and warehouses to fill online and phone orders.

That he did so ahead of his previously mentioned May 18 reopening date was a timely step in the right direction. Retailers who have been urging Baker for the past couple weeks for the change — relatively minor in terms of the number of workers it affects statewide — appreciate the compromise in time for Mother's Day, one of the biggest days of the year for online ordering and Main Street businesses. . . . more

Wednesday, May 6, 2020

Starbucks will reopen 85 percent of its coffee shops, but with new protocols

Washington Post
Starbucks plans to reopen 85 percent of its U.S. coffee shops by the end of this week, with an emphasis on mobile ordering, contactless pickup and cashless payments, as more cities and states ease lockdown restrictions due to the coronavirus pandemic.

The company’s mobile app — which is already used by roughly 20 million customers — will include new options for voice ordering and curbside pickup, chief executive Kevin Johnson wrote in a letter to customers Monday.. . . more

Men’s shirt retailer Untuckit taps real estate restructuring firm to renegotiate deals during coronavirus

Apparel retailer Untuckit has tapped real estate advisory firm RCS Real Estate Advisors to help it evaluate its stores and leases with landlords as the economy reels from the coronavirus pandemic, CNBC has learned.

Untuckit, which started selling men’s shirts online in 2011 before opening its first shop four years later, now has more than 80 locations throughout the U.S. and Canada. . . . more

CVS Beats Q1 Earnings Forecast As COVID-19 Lockdowns Boost Pharmacy and Retail Sales

The Street
CVS posted stronger-than-expected first quarter earnings Wednesday as coronavirus lockdowns boosted retail and pharmacy sales as customers stockpiled household items and medical prescriptions.

Front same store sales rose 8%, from last year CVS said, while comparable pharmacy store sales surged by 9.3%. . . . more

Five Actions to Protect Your Business and Position It For Success Post-Pandemic

Chain Store Age
Malls and stores are slowly starting to reopen as governments remove COVID-19 shelter-in-place measures. We’re already witnessing a cautious reopening take shape in a number of states and Canadian provinces.

However, the environment in which stores are reopening will be far from business as usual. While we expect customers to start shopping again, it is going to be a very slow and gradual re-building of consumer demand. With governments permitting only “essential” retailers to remain open the past few months, we’ve witnessed the inevitable shift of market share from “non-essential” retailers to “essential” ones, and to online-only retailers such as Amazon. . . . more

Kohl's begins reopening stores in some states

Milwaukee Business Journal
Department store chain Kohl’s Corp. has started reopening in some states after temporarily closing all its store because of the Covid-19 pandemic.

The Menomonee Falls-based retailer announced it decided to open in Arkansas, Oklahoma, South Carolina and Utah starting Monday. It has not re-opened any stores in Wisconsin.

As part of re-opening, Kohl’s said it implemented new in-store safety measures.. . . more

Lord & Taylor to liquidate its stores as soon as they reopen
Venerable U.S. retailer Lord & Taylor plans to liquidate inventory in its 38 department stores once restrictions to curb the spread of coronavirus are lifted as it braces for a bankruptcy process from which it does not expect to emerge, people familiar with the matter said on Tuesday.

Lord & Taylor's preparations to liquidate its inventory as soon as its stores reopen offer a window into the grim future of a high-profile retailer - a storied department store chain founded in 1826 and billed as the oldest in the United States - that does not expect to survive the pandemic's economic fallout.. . . more

Nordstrom permanently closing 16 full-line stores as it adapts to coronavirus era

Seattle Times
Nordstrom plans to permanently close 16 of its 116 full-line stores while moving toward a phased reopening of others, as it tailors its immediate future to the realities of retail in the coronavirus pandemic.

The Seattle-based company also said it will make changes to how its stores function in a “market-by-market” approach, and will move its big Anniversary Sale from July to August. . . . more

Tuesday, May 5, 2020

Express expects to reopen 300 stores by Memorial Day; to test curbside pickup

Chain Store Age
Express is the latest retailer to weigh in on its reopening plans for stores closed amid the COVID-19 pandemic.

The apparel retailer said it expects to reopen approximately 300 of its stores before Memorial Day, doing so in accordance with the latest federal and state guidelines and with adherence to new health and safety protocols. Beginning with a few stores that opened last week in Georgia and South Carolina, Express plans on taking a phased approach with the pace and staffing calibrated to mall traffic and consumer demand. . . . more

J.C. Penney files suit as Sephora looks to exit department store chain

Chain Store Age
J.C. Penney filed a temporary restraining order against Sephora in an attempt to prevent the LVMH-owned beauty giant from closing its in-store shops in J.C. Penney stores, some of which are being reopened, reported CNBC.

Sephora and Penney have had a joint enterprise operating agreement since Feb. 1, 2009. Sephora is Penney’s only beauty partner. There are about 600 in-store Sephora shops In Penney. Sephora reportedly wants to end the contract in April 2021, according to the Dallas Morning News. . . . more