Friday, February 28, 2020

J.C. Penney Q4 tops Street but warns sales decline will continue in 2020

Chain Store Age
J.C. Penney is not expecting much relief anytime soon in its sales performance.

The struggling retailer on Tuesday reported better-than-expected sales and earnings for its fourth quarter even as its sales continued to decline. Penney said it expects same-store sales in fiscal 2020 to be down 3.5% to 4.5%, excluding any impact from the coronavirus outbreak. . . . more

Foot Locker plans 20 new power stores and 125 remodels in 2020

Retail Dive
After opening 6 power store locations in 2019, Foot Locker plans to open 20 more of the store format in 2020 across the U.S. and internationally, CEO Dick Johnson said on a conference call with analysts.

He also noted that the company is planning to remodel or relocate 125 stores, 110 of which will be at the retailer's core store locations. The athletics brand also plans to open 65 new stores in 2020 and close 150 globally, impacting mostly Foot Locker U.S. and Europe, as well as Runners Point. . . . more

Baker's HBC privatization bid approved after plenty of ‘noise and aggravation’

Financial Post
Shareholders of storied Canadian retailer Hudson’s Bay Co. voted overwhelmingly to approve a privatization of the firm Thursday following a contentious months-long takeover battle.

The $2 billion take-private transaction led by HBC executive chairman Richard Baker was approved by more than 98 per cent of shareholders who voted, including 94.46 per cent of minority shareholders who were not part of the Baker-led privatization.. . . more

US malls ‘will be hit hard’ if coronavirus worsens, study finds

CNBC
If the coronavirus spreads in the U.S., that could mean really bad news for U.S. mall owners, according to a survey taken this week.

The survey by Coresight Research found that 58% of people say they are likely to avoid public areas such as shopping centers and entertainment venues if the virus’ outbreak worsens in the United States.. . . more

Thursday, February 27, 2020

J.C. Penney reports surprise profit, same-store sales top estimates

Reuters
J.C. Penney Co Inc on Thursday reported a surprise adjusted profit and a smaller drop in comparable sales than anticipated for the fourth quarter, buoyed by demand for women’s apparel, sending its shares up about 3% before the bell.

The century-old department store chain under Chief Executive Officer Jill Soltau has been shutting unprofitable stores, while testing a new store model that includes a yoga studio, a videogame lounge and lifestyle workshops to fight competition from Amazon.com Inc and discount retailers.. . . more

Wednesday, February 26, 2020

Authentic Brands taps former H&M executive to helm Forever 21

Reuters
Forever 21’s new co-owner Authentic Brands Group said on Tuesday it had appointed former H&M executive Daniel Kulle as the new chief executive officer of the bankrupt apparel retailer.

Kulle, a two-decade veteran at the Swedish apparel retailer, most recently worked as strategic adviser to former H&M Group Chief Executive Karl-Johan Persson.. . . more

Tuesday, February 25, 2020

Forever 21's new owners face a slowdown in fast fashion

Retail Dive
Forever 21 has a new lease on life thanks to the successful $81 million bid assembled by the brand conglomerate Authentic Brands Group and the two mall developers that bought it out of bankruptcy.

That's literally true, too — Simon Property Group and Brookfield Property Partners are two of the fast-fashion retailer's major landlords; now they're also two of its major owners, and more stores will likely remain open as a result.

But that doesn't mean that things aren't going to change. . . . more

Macy’s shares jump after earnings top estimates, helped by a last-minute holiday sales boost

CNBC
Macy’s reported fourth-quarter earnings on Tuesday that outpaced expectations, helped by a boost from last-minute shoppers who lifted sales in the days leading up to Christmas.

“Taken as a whole, 2019 did not play out as we intended for Macy’s, Inc. However, we executed well during the Holiday 2019 season,” CEO and Chairman Jeff Gennette said in a statement.. . . more

Monday, February 24, 2020

Can Ghost Kitchens Replace Bankrupt Mall Tenants?

NREI
Ghost kitchens, food preparation facilities used for delivery purposes only, are beginning to set up shop in regional malls, but industry sources are split on their value as tenants.

“I think it would be a mistake to think that [ghost kitchens] are going to move the needle very much for a mall…” says Scott Holmes, national director of retail with brokerage firm Marcus & Millichap.. . . more

Friday, February 21, 2020

Gap partners with ThredUp for secondhand program

MarketWatch
Gap Inc. has partnered with resale company ThredUp to encourage customers to exchange their used clothes for credits that can be used at the namesake chain, Banana Republic, Athleta, or Janie and Jack. Gap is the largest retailer to participate in the ThredUp program, which partners with retailers to help customers "clean out" their closets. Gap Inc. has a goal of diverting 30 million pounds of material from landfills each year. Banana Republic has also partnered with Postmates, adding delivery service to its buy-online-pickup-in-store program for customers in New York City and Southern California. . . . more

Which Regional Mall REITs Might Be the Next Takeover Targets?

NREI
In the wake of Simon Property Group Inc.’s pending $3.6 billion purchase of an 80 percent stake in Taubman Centers Inc.’s operating subsidiary, all eyes are on Macerich Co. as the next potential takeover target among retail REITs.

Santa Monica, Calif.-based Macerich is “next in line” to be acquired, says Alex Pettee, president and director of research and ETFs at Rowayton, Conn.-based investment adviser Hoya Capital Real Estate LLC, thanks to its high-quality portfolio of retail properties. . . . more

Thursday, February 20, 2020

Forever 21 snapped up by mall owners, Authentic Brands

Chain Store Age
The sale of the bankrupt fast-fashion retailer to brand management and licensing firm Authentic Brands Group, Simon Property Group and Brookfield Property Partners has been finalized. Under the terms of the deal, ABG and Simon will each own 37.5% and Brookfield will own 25% of Forever 21’s intellectual property and operating businesses.

The new owners will maintain Forever 21’s headquarters in Los Angeles, as well as its e-commerce business. According to a report by Bloomberg, the owners also plan to keep most of the chain’s 448 U.S. stores open under the leadership of a new CEO that will be announced when the company emerges from Chapter 11. . . . more

A diminished Victoria's Secret is sold

Yahoo Finance
Victoria's Secret, beset by falling sales and uncomfortable questions about its billionaire founder who has run the company for five decades, is being sold.

The company's owner, L Brands, said that the private-equity firm Sycamore Brands will buy 55% of Victoria's Secret for about $525 million. The Columbus, Ohio company will keep the remaining 45% stake. . . . more

Wednesday, February 19, 2020

Did Simon Property Group Just Rewrite Retail’s Script?

Globe St.
Earlier this month Simon Property Group rocked the retail community not only with its announcement that it had bid $3.6 billion for a stake in Taubman Centers, but also that the price it was paying was a 51% premium, according to Morningstar (per Bloomberg). This price spoke volumes about the value these assets have for Simon as well as the industry as a whole, according to analyst Kevin Brown, as it suggests that class A mall REITs in general are undervalued.

Essentially, this analysis rewrites retail’s script of the last several years in which the asset class has been mainly playing defense, and not always successfully.. . . more

Friday, February 14, 2020

Real Estate Fund Redemptions Surge on Alarm Over Malls

NREI
Real-estate funds in the U.S. and Europe are struggling to meet a surge in investor requests to get their cash back, a sign of mounting concerns about the viability of retail properties in the e-commerce era.

The latest to come under duress: UBS Group AG’s flagship real estate fund, which has raised about $25 billion and owns malls across the U.S. Investors are waiting to withdraw about $7 billion from the bank’s Trumbull Property Fund after it underperformed for an extended period, according to a person familiar with the matter who asked not to be identified because the details are private. . . . more

Never Mind the Internet. Here’s What’s Killing Malls.

The New York Times
Despite a strong consumer economy, physical retailers closed more than 9,000 stores in 2019 — more than the total in 2018, which surpassed the record of 2017. Already this year, retailers have announced more than 1,200 more intended closings, including 125 Macy’s stores.

Some people call what has happened to the shopping landscape “the retail apocalypse.” It is easy to chalk it up to the rise of e-commerce, which has thrived while physical stores struggle. And there is no denying that Amazon and other online retailers have changed consumer behavior radically or that big retailers like Walmart and Target have tried to beef up their own online presence.

But this can be overstated.. . . more

Thursday, February 13, 2020

Breaking Down Simon’s Bet on Taubman

NREI
Last week rumors emerged that retail real estate giant Simon Property Group was contemplating acquiring Taubman Centers. On Monday, those rumors came to fruition when the Indianapolis-based REIT announced it had reached an agreement to acquire the Bloomfield Hills, Mich.-based company in a deal valued roughly $3.6 billion.

It marked an unexpected climax for two companies that have deep roots in the American mall industry. . . . more

Wednesday, February 12, 2020

New Galleria at Crystal Run: Trampolines, hotel, upscale restaurants and pumping iron

Poughkeepsie Journal
Pyramid Management Group’s goal these days. The Syracuse company wants to transform the Galleria into more than a mall, so it can survive and thrive in a time when hundreds of malls and tens of thousands of stores have closed since the Great Recession 12 years ago.

Pyramid wants to turn the Galleria into no less than a massive main street — the municipal center the Town of Wallkill has always lacked, with restaurants, entertainment, a hotel and even a residential real estate development.. . . more

Retail landlords go shopping for bankrupt chains

Boston Business Journal
Property executives are unlikely stewards of youthful clothing brands. But Forever 21 is to be subsumed by two of its largest landlords after retail specialists balked at the prospect of reviving the fortunes of the distressed fast-fashion company.

A Delaware bankruptcy judge this week gave the go-ahead to a rescue bid from Simon Property Group and Brookfield Property Partners, a highly unconventional transaction that shows how turmoil in retail is upending long-standing business practices.. . . more

Simon & Taubman: New-age pressures force marriage of old rivals

Chain Store Age
Simon’s 2003 attempt to take over Taubman Centers, a failed bid that set the big mall owners at odds ever since, has culminated in a merger forced by conditions of the times.

“Last year we predicted that we were going to be seeing consolidation among REITs in the mall space. They’ve lost a lot of leverage with retailers. Retailers gained the upper hand, closing stores and driving rents down. So mall owners are forced to consolidate to add more growth,” said Greg Maloney, president and CEO of JLL Retail.. . . more

Tuesday, February 11, 2020

Burlington continues to attract new restaurants

Wicked Local
Fogo de Chao Currascaria, a Brazilian steakhouse chain, will be coming to the Burlington Mall next fall, it was announced this week, joining the ever-growing slate of restaurants flocking to Burlington.

Also new to Middlesex Turnpike, the Yard House chain held a ribbon cutting for its new establishment across from the mall last week.

The Burlington Mall recently announced Shake Shack will also join the lower level Primark wing and Karma restaurant next to Frank Pepe Pizzeria Napoletana this spring. Lands’ End will also be relocating to the lower level Primark wing next to a new Milton’s men’s store, which will open a 12,200 square foot store next fall. . . more

Malls Need A Survival Strategy Now That Macy’s Announced It Is Moving Out

Forbes
The fate of many of the nation’s malls hangs in the balance after Macy’s just announced it will close 125 of its stores over the next three years, most of them Macy’s. The move will leave Macy’s with only about 400 stores remaining after shrinking from a high of 773 stores in 2014.

To add insult to injury, Sephora just announced it would open 100 new stores, but most of those will be outside traditional malls where they have been an important in-line tenant.. . . more

Monday, February 10, 2020

Sears and Kmart store closings continue. Is your location closing in early 2020?

USA Today
More Sears and Kmart stores are set to close in the next couple of months.

The going-out-of-business liquidation sales at 51 Sears and 45 Kmart stores – first announced in November by parent company Transformco – are expected to wrap up by mid-February, company spokesman Larry Costello confirmed Jan. 31. . . . more

Simon to buy Taubman Centers in all-cash mega-deal

Chain Store Age
The nation’s largest mall operator is getting bigger.

Simon Property Group Inc. has entered into an agreement to acquire Taubman Centers in a deal valued at approximately $3.6 billion. Simon will acquire all of Taubman’s common stock for $52.50 a share in cash (a 51% premium to Taubman closing price on Friday, Feb.7). The Taubman family, which is selling approximately one-third of its ownership interest, will retain a 20% stake in Taubman Realty Group.. . . more

Victoria’s Secret reportedly close to being sold to Sycamore Partners

Chain Store Age
Victoria’s Secret may be going private.

L Brands, parent company of Victoria’s Secret and Bed, Bath & Body Works, is close to a deal to selling the troubled lingerie brand to private equity firm Sycamore Partners, reported CNBC. The deal could be announced this week, the report said. . . . more

Friday, February 7, 2020

Macy's revamps private label to reach millennials

Retail Dive
At its Investors Day on Wednesday, Macy's revealed that key to its new "Polaris" turnaround strategy is a refurbishment of its private label brands, especially in women's apparel.

The retailer sees opportunity in appealing to millennial customers, who have largely shunned its stores and its private labels in favor of rivals. Ongman noted that millennials account for half the ready-to-wear market outside of Macy's, where "under 40" apparel shoppers account for just 35%. . . . more

Casper, the mattress startup, goes through with lackluster IPO

Boston Business Journal
Casper Sleep, a startup that sells mattresses online, became on Thursday the latest money-losing outfit to get a cold shoulder from Wall Street investors.

The company’s stock began trading on the New York Stock Exchange at $14.50 a share, slipped below $14 in the afternoon and closed at $13.50. The lackluster first day of trading did not come close to fulfilling what Casper’s venture-capital investors thought it was worth a few months ago.. . . more

Macy's Closing More Stores, 4 N.H. Locations Threatened

Patch.com
Macy's said Tuesday it plans to close 125 stores over the next three years, representing a fifth of the retail giant's locations, according to a report. The news comes on the heels of a similar announcement made in January when the company said it would close at least 28 stores.

While it was unknown which locations will be shuttered in this latest round of closings, the news could impact any and all of the four Macy's stores in New Hampshire.. . . more

Thursday, February 6, 2020

Macy’s Turnaround Plan Includes New Store Concept

Globe St
On Wednesday of this week Macy’s announced it will close 125 stores over the next three years. On Thursday it is set to open what the retailer hopes will be the antidote to future closings. It is a new store concept called Market by Macy’s in Southlake, Texas.

Market by Macy’s will be about 15,000 square feet, or one-tenth the size of a typical Macy’s. It will feature clothing, home decor, an apothecary and an in-store cafe. These stores will be located off-mall in lifestyle centers. Macy’s Chief Executive Jeff Gennette told analysts that he plans to have four or five of the new stores open by the end of this year.. . . more

Tiffany stockholders approve LVMH acquisition

Retail Dive
Tiffany & Co. will join the luxury portfolio of Parisian conglomerate LVMH Moët Hennessy Louis Vuitton, the companies announced on Monday.​ LVMH "will acquire Tiffany for $135 per share in cash, in a transaction with an equity value of approximately €14.7 billion or $16.2 billion," according to a press release from the companies.

The deal is expected to close in the middle of 2020 and is subject to customary closing conditions, including approval from Tiffany's shareholders and regulators, according to the release.. . . more

Wednesday, February 5, 2020

Simon Property Holds Deal Talks with Taubman

NREI
Simon Property Group Inc. has held merger talks with rival U.S. shopping-mall operator Taubman Centers Inc., according to people familiar with the matter.

The real estate investment trusts have been holding on-and-off-again discussions since late last year, said the people, who asked not to be identified because the matter isn’t public. Talks between the companies stalled in recent days amid market volatility and it’s unclear if and when they will resume, one of the people said.. . . more

Tuesday, February 4, 2020

Taunton Galleria tenants evicted, mall’s main entrance locked

Taunton Daily Gazette
Legal notices informed Silver City Galleria tenants that their license-at-will agreements — which had been in effect since last spring when the mall property was purchased for $7.5 million at foreclosure auction — are being terminated.

Those tenants have until the end of this month to vacate the premises.

In a story that ran in the Taunton Daily Gazette just over a week ago, property owner William Thibeault said that at-will tenants with month-to-month agreements were leaving the mall of their own accord. . . . more

Macy’s to close 125 stores, cut 2,000 corporate jobs, in hunt for growth

CNBC
Macy’s will shut 125 stores over the next three years and slash about 2,000 corporate jobs, as it shutters its tech offices in San Francisco and its Cincinnati headquarters, the company announced Tuesday afternoon.

The department store chain said it plans to exit weaker shopping malls, and instead will shift its focus toward opening smaller-format stores in strip centers.. . . more

Is Simon and Brookfield’s Forever 21 Buy a Smart Play or a Hail Mary Pass?

NREI
After months of speculation, mall owners Simon Property Group and Brookfield Property Partners bit the bullet and made a bid for bankrupt fast-fashion retailer Forever 21. Simon and Brookfield, in partnership with Authentic Brands, are reportedly looking at a bargain deal at $81 million for essentially all of the company’s assets, but the decision to buy the chain might be an indication of how much pressure mall landlords are facing to keep their centers occupied.

Last year U.S. store closings reached an all-time record with approximately 9,300 shuttered locations.. . . more

GameStop downgraded by Moody's as retailer faces 'sustained competitive threats'

Retail Dive
Moody's downgraded GameStop's corporate rating to B2 from Ba2 due to “weaker than anticipated sales and operating performance, driven largely by declines in new hardware and software sales," weeks after the gaming retailer reported crushing sales declines during the holiday period. Analysts with Moody's expect sales to drag through 2020 as customers hold off on new game purchases until the next generation of consoles are released.

"Sustained competitive threats from downloadable, streaming, and subscription gaming services, as well as the company's ongoing transformation to improve profitability and evolve its vendor and partner relationships, elevate the company's business and operational risk during a period of industry weakness," Moody's Vice President Adam McLaren said in a statement. Moody's has a stable outlook for GameStop.. . . more

Monday, February 3, 2020

Dave & Buster's to open at The Mall of New Hampshire on March 30

Union Leader
New Hampshire’s first Dave & Buster’s arcade and sports bar will open in part of the former Sears at the Mall of New Hampshire by the end of March, bringing more than 200 jobs.

Dave & Buster’s announced Wednesday it will open its 137th location in the 34,400-square-foot space on March 30. Dick’s Sporting Goods opened in the other half of Sears in October.

For the past several years, Dave & Buster’s, based in Dallas, has targeted shuttered Sears locations, including the Natick Mall in Massachusetts. ...more

Forever 21 Reaches Deal With Mall REITs

Globe St
Forever 21 has reached a deal to be sold to a consortium made up of Simon Property Group, Brookfield Properties and Authentic Brands Group for $81 million.

The retailer filed for Chapter 11 bankruptcy four months ago with plans to close up to 178 stores in the US and as many as 350 outlets globally.

The sale would include all of Forever 21′s assets.. . . more

J.C. Penney expands marketing team with four new VPs

Chain Store Age
J.C. Penney Company continues to remake its leadership team under the leadership of CEO Jill Soltau, naming six new VPs.

The struggling retailer named Wendy Santana as VP of business development, responsible for identifying and overseeing partnerships and strategic business initiatives. She joins Penney after 20 years at Li & Fung – LF Americas/Oxford Collections, where she most recently served as executive VP. . . . more

Macy’s to unveil new freestanding store concept

Chain Store Age
Macy’s Inc. is getting ready for a big reveal.

The department store giant is planning to open a new freestanding store format that will include a strong beauty element, reported WWD. The store, which will include a café, will debut in Southlake, Texas.

The concept will take an apothecary-based approach to beauty, and feature both established and new, emerging brands, according to the report. It is also believed the store will have a wellness component. . . . more