Tuesday, March 31, 2020

Malls Survived The Retail Apocalypse, But Coronavirus Threatens To Be Their Armaggedon

Forbes
On Sunday President Trump announced that federal social distancing measures will continue through the end of April. While he said that details of the extended recommendations would follow on Tuesday, it is likely that all non-essential stores, including malls, will remain closed till then.

These are necessary steps to save people’s lives, yet it may result in the death of many retailers. Malls, in particular, are at most risk in these days of social distancing,. . . more

Simon Property furloughs 30% of workforce

CNBC
The biggest U.S. mall owner, Simon Property Group, has furloughed about 30% of its workforce, CNBC has learned, as the company copes with all of its properties being temporarily shut because of the coronavirus pandemic.

The furloughs impact full- and part-time workers, at its Indianapolis headquarters and at its malls and outlet centers across the U.S., a person familiar told CNBC. . . . more

Friday, March 27, 2020

GameStop Set To Close 300 More Stores This Year

IGN
GameStop is set to permanently close 300 more stores in the coming year.

The news arrived in an earnings call conducted by the company, which shed light on GameStop's financial situation. It was revealed that the company "plans to meet or exceed" the number of closures that occurred in the previous fiscal year, which saw 321 shops close their doors. The retailer currently has 5,500 operational stores across the US. . . . more

Gap pulls forecast, suspends dividend, taps $500 million credit as coronavirus bites

Reuters
Gap Inc on Thursday withdrew its full-year forecast issued just two weeks ago, suspended its dividend and said it will draw down on its entire $500 million credit facility as the apparel retailer looks to weather the coronavirus crisis.

The disruptions caused by the health crisis mark the latest headache for newly named Chief Executive Officer Sonia Syngal as she tries to revive demand for its apparel in a competitive market plagued by slowing footfall in malls.. . . more

Thursday, March 26, 2020

What Retailers Will Be Left Standing After the Coronavirus Pandemic Ends?

Retail Dive
Across the U.S. this week, many thousands of stores and hundreds of malls lay dark, as the country tries to slow the spread of the novel coronavirus. Around 100 retailers have closed all or a significant fraction of their stores.

To state the obvious: American retail as we know it has never gone through an event like this, not at this scale or magnitude. That means the playbook is being written on the fly.. . . more

REIT Pricing Suggests CRE Values Have Repriced Lower

Globe St.
Many investors are hitting the pause button, at least for the short-term, as the pandemic plays out. Market volatility and a general uncertainty are surely contributing factors to the decision, but in addition, it has become challenging to price deals in the current market and face-to-face interaction has come to a halt.

“No one knows what pricing is right now. How do value a home right now? How do you value a regional mall right now? There is a lot of skepticism in the market, and no one knows how to value anything,” David Shulman, senior economist at UCLA Anderson, tells GlobeSt.com.. . . more

Wednesday, March 25, 2020

Pandora taps H&M veteran to lead retail turnaround

Chain Store Age
Pandora has appointed Martino Pessina to the newly established role of chief commercial officer, effective April 2.

Pessina joins the Copenhagen-based jewelry retailer from fast-fashion giant H&M. where he served as president, North America. Pessina has spent close to 20 years in different roles at H&M and been in charge of retail, sales, merchandising, operations and global expansion.. . . more

Tuesday, March 24, 2020

Neiman Marcus Considers Bankruptcy to Ease Crushing Debt Load

Bloomberg
Neiman Marcus Group Inc., the luxury retailer that’s been struggling to ease its $4.3 billion debt load, is talking with lenders about filing for bankruptcy, according to people with knowledge of the matter.

No formal decisions have been made, but Neiman Marcus has held initial talks with lenders about a potential bankruptcy loan that would keep the company running while it works out a recovery plan, the people said. They asked not to be identified discussing a private matter. . . . more

Friday, March 20, 2020

Taubman Centers temporarily closing all but two of its properties

Chain Store Age
Taubman Centers has gone dark in response to COVID-19 with the exception of two outdoor centers.

The real estate investment trust said its malls closed at the end of business on March 19 and will remain shuttered through March 29, or later if required by state or local government. Tenants at the company’s open-air, street-front retail centers – Country Club Plaza (Kansas City, Mo.) and International Market Place (Waikiki, Hawaii) – may continue to operate. The announcement comes on the heels of Simon’s decision to close all of its retail properties in the U.S. until March 29.. . . more

Zumiez Uncertain How Social Distancing Will Impact Sales

SGB Media
Zumiez Inc.’s fourth-quarter earnings came in better than expected and momentum continued into February. Sales are generally holding up well in its home state of Washington despite the coronavirus although officials aren’t sure to what extent social distancing will hurt sales.
On the Q&A session the company’s conference call on March 12, Zumiez’s officials were asked to what degree online sales would make up for in-store sales with the calls for social distancing.

Rick Brooks, CEO, said the answer depends on reach retailer’s connections with consumers. He noted that Zumiez’s stores remain key ingredients to its connection with customers. . . . more

Facing cash crunch, J. Jill borrows $33M from lenders

Boston Business Journal
J. Jill Inc. has borrowed $33 million from its lenders — near the limits of its line of credit — as the struggling women’s clothing retailer grapples with the loss of revenue from stores closed by the coronavirus.

The Quincy-based company is drawing down the majority of a $40 million revolving credit facility “as a precautionary measure,” it said in a securities filing Wednesday. J. Jill closed all of its stores on Wednesday because of the coronavirus outbreak, and they will remained closed through at least March 27. As of the end of 2019, it had more than 280 stores nationwide. . . . more

Thursday, March 19, 2020

Simon closing malls, including Copley Place, through March 29

Boston Business Journal
Simon Property Group Inc., one of the country’s biggest retail landlords, is closing all of its domestic retail properties, malls, outlets and mills, the Indianapolis-based company said Wednesday.

"The health and safety of our shoppers, retailers and employees is of paramount importance and we are taking this step to help reduce the spread of COVID-19 in our communities," said David Simon, chairman, president and CEO of Simon Property Group (NYSE: SPG), in a statement.. . . more

Tuesday, March 17, 2020

Life Isn’t Just About Money, Says CEO of Mall Owner Down 99%

Bloomberg
Shares of CBL & Associates Properties Inc. are down 99% from their peak, but Stephen Lebovitz is undeterred.

After all, he started working at the family business in the middle of the savings and loan crisis. When he succeeded his father as chief executive officer two decades later, the 2008 financial crash was still reverberating throughout the U.S. economy.

Now he faces perhaps his most seminal challenge yet: To convince Americans who increasingly shop online that they should keep coming to CBL’s malls -- even as the coronavirus spreads across the U.S. -- and persuade Wall Street that the effort will work.
. . . more

Update on coronavirus-related store closings — and impact

Chain Store Age
The nation’s major specialty retailers, many of them mall-based, are temporarily closing stores and or reducing hours in the wake of the coronavirus pandemic.

The decisions, in line with recommendations by the CDC and public health officials to help slow the spread of COVID-19, are likely to have a big impact on many retailers’ earnings going forward. . . . more

Laura Ashley set to become first retail casualty of crisis

Sky News
The fashion to homewares shop Laura Ashley is set to become the first retail casualty of the coronavirus crisis, placing 2,700 jobs at risk.

Sky News reported at the weekend how the firm was scrambling for a funding lifeline to avert collapse but the company all but admitted defeat on Tuesday, saying it had filed intentions to appoint administrators.. . . more

Coronavirus Already Taking Big Toll on Urban Malls

The Wall Street Journal
Malls in dense, urban locations have in recent years have generally been more profitable than those in sparsely-populated areas, because foot traffic is typically stronger. But with the coronavirus spreading at a faster rate in metropolitan areas, many of these malls are poised to take a big hit. Some tenants, likely to be hurt by falling foot traffic and by orders from the authorities to close, may struggle to pay their rent.

Over the weekend, one of the biggest malls in the country, King of Prussia mall in the Philadelphia area, closed its doors on orders from local authorities. . . . more

Nordstrom Closing All Stores in US and Canada for Two Weeks Amid Coronavirus Acceleration

Footwear News
Nordstrom is closing all of its 380 stores for two weeks in an effort to help limit the spread of coronavirus.

The announcement came a few hours after Saks Fifth Avenue said it would close its Manhattan and Philadelphia units for two weeks.

Nordstrom’s move includes all full-line stores as well as Nordstrom Rack, Trunk Club clubhouses and Jeffrey units. . . . more

Friday, March 13, 2020

Gap’s earnings, sales beat, retailer names new CFO

CNBC
Gap Inc. on Thursday reported fourth-quarter earnings and sales that topped analysts’ estimates, as it announced a slew of new leadership changes.

“We began to see stabilization in our business in the fourth quarter, driven primarily by improvement in Old Navy’s performance,” interim CEO Bob Fisher said in a statement.. . . more

Thursday, March 12, 2020

Experiential Retail Reigns in 2020

Commercial Property Executive
The U.S. retail market closed 2019 with strong fundamentals, paving the way for a robust phase in 2020, according to JLL’s new fourth quarter 2019 Retail Outlook report. And shopping malls, thought to be on the road to extinction just a few years ago, helped buoy the numbers. The key to success: Experiential retail.

The retail market saw a vacancy rate of just 4.6 percent in the fourth quarter of 2019. Putting it all in perspective, the industrial market, currently an investor favorite due to the ever-blossoming e-commerce industry, recorded a vacancy rate of 5.1 percent according to another JLL report. Net absorption in the retail sector skyrocketed 34.5 percent quarter-over-quarter, reaching 10.5 million square feet, with malls leading the way. Mall absorption totaled 1 million square feet in the fourth quarter, as vacated space plummeted 40 percent year-over-year. Regional mall properties surpassed all other property types with 556.9 million square feet of positive net absorption.. . . more

Neiman Marcus streamlining; getting out of the outlet store business

Chain Store Age
Neiman Marcus Group is sharpening its focus on its core business: selling full-price luxury goods.

The retailer announced that, as part of its four-year “transformation growth plan,” it is closing the majority of its 22 Last Call outlet stores before the beginning of its next fiscal year, which starts in early August. Select Last Call locations will remain open to serve as a selling channel for Neiman Marcus residual inventory.. . . more

Coronavirus Crisis Comes At A Bad Time For U.S. Shopping Malls

bisnow.com
The once-bustling corridors of American shopping malls have already suffered from slowing sales, and the coronavirus outbreak threatens to turn retail properties across the country into ghost towns as consumers shy away from large public places.

"We would consider [retail] to be very vulnerable at this time," said CoStar Senior Analyst Kevin Cody, a researcher specializing in the retail sector. "It was already vulnerable before with many retailers struggling.". . . more

Wednesday, March 11, 2020

Brockton politicians push tax break for Westgate Mall

The Enterprise
In exchange for a commitment to create jobs in Brockton, city officials are providing a tax break to the Westgate Mall.

The company behind the Westgate Mall is seeking a tax increment financing agreement with the city, exempting the business from most of the property taxes it would otherwise pay on new value assessed at the mall from fiscal 2021 through 2030. Over the course of the 10-year deal, the Westgate Mall would save an estimated $2,098,797 in property taxes, according to a copy of the agreement.. . . more

Monday, March 9, 2020

Dillard's downgraded after a weak Q4

Retail Dive
S&P Global downgraded Dillard's, to BB from BB+, citing the department store chain’s "weak operating results for the holiday season and full year 2019, with continued profitability decline from previous years," according to an emailed press release.

The retailer reported fourth quarter net sales fell more than 4% year over year to $1.9 billion as comparable sales fell 3%, according to a press release. For the full year, comps were down 1%.. . . more

Friday, March 6, 2020

Gap Inc. taps insider as its next CEO; names exec chairman

Chain Store Age
Gap Inc. has selected the head of its fastest-growing brand as chief executive.

The struggling apparel giant named Sonia Syngal, CEO of Old Navy since 2016, as chief executive officer, effective March 23. She will also join Gap’s board. Syngal’s appointment comes shortly after Gap scrapped plans to split Old Navy into an independent public company, citing the cost and complexity involved in the move.. . . more

Thursday, March 5, 2020

American Eagle Outfitters to accelerate Aerie growth

Chain Store Age
American Eagle Outfitters’ fourth-quarter sales and earnings beat analysts’ estimates fueled by strong demand for its Aerie intimates brand.

Aerie has been a major growth driver for the company in recent years, with its inclusive, body-positive messaging resonating with younger shoppers. American Eagle intends to build on the brand’s growing momentum. It intends to accelerate the growth of Aerie in 2020, opening 60 to 70 stores, with a heavy emphasis on stand-alone locations, executives said on the company’s quarterly earnings call with analysts. . . . more

Tuesday, March 3, 2020

Nordstrom shares dive on earnings miss, Erik Nordstrom to become sole CEO

CNBC
Nordstrom announced Tuesday it is changing its leadership structure, appointing Erik Nordstrom as sole CEO and retiring its co-presidency.

It announced the changes as it reported fourth-quarter earnings and sales that missed analysts’ estimates, sending shares tumbling.

Nordstrom also said it will be shrinking its board to 10 directors from 11.. . . more

Monday, March 2, 2020

J.C. Penney expands curbside pickup

Chain Store Age
J.C. Penney Co. is taking a page out of Walmart’s and Target’s playbooks.

The struggling department store retailer is offering a curbside pickup option known as “Style on the Go” at 50 locations across the U.S. Penney piloted the service in November 2019 at its totally revamped and reimagined store in the Hurst, Texas, a Dallas suburb. Following positive customer response, Penney’s decided to expand curbside pickup further.  . . . more