Friday, June 28, 2019

How Should Retail Leases Account for Omni-Channel Transactions?

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?

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

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

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

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

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

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

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

Tuesday, June 25, 2019

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

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

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

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

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

Wednesday, June 19, 2019

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

Monday, June 17, 2019

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

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

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

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

Thursday, June 13, 2019

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

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

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

Mall Landlords Can Benefit from Retail Space Sharing

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

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

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

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

Tuesday, June 11, 2019

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

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

Monday, June 10, 2019

J.C. Penney Loses a Key Finance Executive

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

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

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

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

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,, which re-launched June 3, 2019.. . . more

Wednesday, June 5, 2019

Report: 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

Destiny USA gets extension on mortgage
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

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

The Mall Meltdown Continues

The Wall Street Journal
Retailers’ earnings season has gone from bad to worse. The bleeding intensified last week, with shares of Abercrombie & Fitch plummeting 26% on Wednesday, the biggest percentage decline since the company went public. PVH Corp., owner of brands including Van Heusen, Tommy Hilfilger, and Calvin Klein, dropped 10% that day, too. On Thursday, women’s wear chain J.Jill was down a jaw-dropping 53% and on Friday, Gap Inc. slid 9%.

It is hard to miss what all of these retailers have in common: They are mall-based. . . . more

Forever 21, struggling with global expansion, explores a debt restructuring

Los Angeles Times
Fast-fashion chain Forever 21 Inc. is in talks with potential lenders and restructuring advisors as it explores options for turning around its ailing business, according to people familiar with the matter.

The Los Angeles company is exploring financing that would shore up its liquidity and ensure founder Do Won Chang maintains control, said the people, who asked not to be identified because they’re not authorized to speak publicly. The chain has also spoken with Apollo Global Management about lining up potential debtor-in-possession financing if it were to seek bankruptcy protection, the people said.. . . more