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You Can Kick The Can Down The Road, But Reality Will Catch Up With You Eventually

October 13, 2018

You Can Kick The Can Down The Road, But Reality Will Catch Up With You Eventually

Nobody can defy the laws of economics forever.  Whether it is an individual, a company or the nation as a whole, reality always catches up with everyone eventually.  For years, I have been warning that Sears was eventually going to zero, but of course it didn’t happen immediately.  Sears CEO Eddie Lampert kept convincing investors to pour more money into his beleaguered money pit, and so the can kept getting kicked down the road.  It takes a great con man to be able to pull off what Eddie Lampert was able to pull off, and we should all be in awe at the level of skill that he has displayed.  But all good cons eventually come to an end, and now the retailer that was once the largest in world history is coming to an end.  According to multiple media reports, a Sears bankruptcy filing is imminent.  For a while there it looked like it would be a Chapter 7 filing which would mean immediate liquidation for Sears.  But it appears that Lampert will be able secure enough funding to give Sears a little bit of breathing space.  A Chapter 11 bankruptcy filing will allow most of the stores to stay open through the holidays and will give Sears more time to sell off more assets.

I can’t even imagine who would be dumb enough to hand Lampert more money at this point, and this is yet another example that shows that the old saying “a sucker is born every minute” is definitely true.

And we are not talking about a small amount of money.  According to USA Today, Sears is going to need between 300 and 500 million dollars just to keep operating through the holidays…

…click on the above link to read the rest of the article…

The Retail Apocalypse Picks Up Speed As Sears, JCPenney, Brookstone And Mattress Firm Spiral Toward Bankruptcy

October 3, 2018

The Retail Apocalypse Picks Up Speed As Sears, JCPenney, Brookstone And Mattress Firm Spiral Toward Bankruptcy

Over 20 major retailers have filed for bankruptcy since the beginning of last year, and in 2018 we may break the all-time record for annual store closings that was established just last year.  We are in the midst of the worst retail apocalypse in American history, and it appears to be picking up speed as retail giants such as Sears, JCPenney, Brookstone and Mattress Firm spiral toward bankruptcy.  We live at a time when the middle class is being systematically destroyed, and so the truth is that U.S. consumers simply do not have as much discretionary income as they once did.  Many large retailers believed that things would eventually turn around, and they have been fighting very hard to survive, but now time has run out for quite a few of them.

Mattress Firm

Everyone knew that Mattress Firm was in deep trouble, but it still surprised many of us when it was announced that they are officially planning to file for bankruptcy.  The following comes from Reuters…

Mattress Firm Inc, the largest U.S. mattress retailer, is preparing to file for bankruptcy protection as soon as this week, as it seeks to exit costly store leases and shore up its business, people familiar with the matter said on Tuesday.

At this moment Mattress Firm has approximately 3,000 brick-and-mortar locations, and as those stores close down those abandoned buildings are going to be giant eyesores on street corners all over America.

Brookstone

When I was a kid back in the 1980s, it seemed like Brookstone had an outlet in every mall I visited.  But now Brookstone has filed for bankruptcy, and all remaining mall stores will be shut down…

…click on the above link to read the rest of the article…

It’s Over for Sears Canada

October 11, 2017

It’s Over for Sears Canada

Brick and mortar meltdown.

Sears Canada hired the same leading bankruptcy advisory firm on June 12 that had represented Target Canada in its insolvency proceedings. Ten days later, it filed for bankruptcy protection to restructure its capital and its operations, shutter dozens of it 225 stores and lay off nearly 3,000 employees, but planned to continue operating. Today it said that the restructuring efforts failed, and that it would seek court approval to liquidate, shutting all its remaining stores and laying off its remaining 12,000 employees.

Retailers are notoriously difficult to restructure. Once they’re this deep in trouble, after years of losses, they own few assets and are burdened with debts, as everything has been sold or pledged to creditors. Their suppliers, who’ve been burned too many times, are getting skittish. Lenders are getting desperate. And acquirers can be impossible to find. Most retailer bankruptcies start out as restructurings but end as liquidations.

To stay alive while losing money for years, Sears Canada has sold off most of its real estate holdings, and the most valuable assets are already gone. What’s left are C$1.1 billion ($880 million) in liabilities.

“The company deeply regrets this pending outcome and the resulting loss of jobs and store closures,” the company said in the statement.

Pending court approval to begin the liquidation process, Sears Canada said that it would kick off liquidation sales at its stores as soon as October 19 and continue through the holiday selling period.

In the bankruptcy filing in June, the company spoke of its “reinvention” and its “brand reinvention,” how it “rebooted its customer experience and service standards,” and how its “newly designed site built in-house by a new technology team” and some other factors would make this restructuring work.

…above link to read the rest of the article…

It’s A Retail Apocalypse: Sears, Macy’s And The Limited Are All Closing Stores

January 11, 2017

It’s A Retail Apocalypse: Sears, Macy’s And The Limited Are All Closing Stores

retail-apocalypse-public-domainIt has only been two weeks since Christmas, and already we are witnessing a stunning bloodbath of store closings.  Macy’s shocked the retail industry by announcing that they will be closing about 100 stores.  The downward spiral of Sears hit another landmark when it was announced that another 150 Sears and Kmart stores would be shutting down.  And we have just learned that The Limited is immediately closing all stores nationwide.  If the U.S. economy is doing just fine, then why are we experiencing such a retail apocalypse?  All over America, vast shopping malls that were once buzzing with eager consumers now resemble mausoleums.  We have never seen anything quite like this in our entire history, and nobody is quite sure what is going to happen next.

Not too long ago I walked into a Macy’s, and it was eerily quiet.  I stumbled around the men’s department looking for something to buy, but I was deeply disappointed in what was being offered.  After some time had passed, an employee finally noticed me and came over to help, but they didn’t have anything that I was looking for.

And it is a sad thing, because over the past several years when I have gone into Macy’s looking to spend money, most of the time I have come out of there without spending a penny.  Macy’s has made some very bad decisions recently, and I am hoping that they can still turn things around.  But for the moment, they are closing stores and cutting jobs.  The following comes from the New York Times…

…click on the above link to read the rest of the article…

‘Footprint Rationalization’: Sears adds to Woes of Canada’s Malls

January 26, 2016

‘Footprint Rationalization’: Sears adds to Woes of Canada’s Malls

The industry spirals into turmoil.

After bouts of store closings that started in 2013, Sears Canada has about 95 department stores, 10 outlet stores, and 40 home stores left. Now, according to the Globe and Mail, it will close even more stores.

It’s been tough for brick-and-mortar retailers in Canada. The collapse of the price of oil and the brutal drubbing administered to the tar-sands sector, the high-cost oil producer globally, haven’t helped. The overall economy is uneasy. And the migration to online shopping is unstoppable, a phenomenon that is also wreaking havoc among brick-and-mortar retailers in the US.

How tough is it in Canada’s retail land? Some salient recent examples:

Target, after only a little over two years in Canada, shuttered its 133 stores and was gone by April 2015, an episode that cost it $7 billion.

Best Buy closed 66 of its Future Shop stores in March 2015 and converted the remaining 65 to struggling Best Buy stores.

Then there’s Blacks, a Canadian camera shop chain that also sold cellphones and other things. It and its 113 stores were acquired by Canadian PE firm ReichmannHauer Capital Partners in 2007, when PE firms piled into brick-and-mortar retail. RHCP was smart enough to sell it in 2009 to telecom operator Telus, who shuttered the remaining stores in August 2015.

Sony closed all of its 14 stores in Canada in early 2015.

Mexx Canada, a Netherlands-based retailer, liquidated all its 95 stores in Canada in early 2015.

Reitmans, a Canadian retailer specializing in women’s clothing under a number of different store brands, announced in November 2014 that it would close 107 Smart Set stores.

A spate of US retailers, including Gap and Staples, have announced that they would close stores in “North America,” without specifying how many of their stores in Canada would be closed.

In terms of population, Canada is smaller than California. So this has an impact.

…click on the above link to read the rest of the article…

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