Archive for June 30th, 2008

Report on the Antiwar Protest at a Long Island Mall

by David Bodamer June 30th, 2008

protest

The planned protest that I linked to on Friday took place over the weekend. It sounds like it went off without a hitch. Mall management accompanied the protesters on a brief march through the mall. Newsday also has a slide show.

As the protesters walked, they were trailed by at least a dozen mall officials, security guards and publicists.

Guards on foot and riding on Segway motorized scooters talked into two-way radios. A mall-hired cameraman videotaped the group’s every move. The mall has said it is legally entitled to eject anyone protesting on its property. In a statement, the mall owner said its policies do not allow “protests or demonstrations of any kind … on mall property regardless of the topic.”

At one point, the group formed a circle near Tourneau and Banana Republic stores, reciting prayers and holding hands.

No Comments Related Topics: Management & Leasing, News, Retail Real Estate |

J.Crew’s Madewell Taking Off

by David Bodamer June 30th, 2008

According to The Associated Press, J. Crew CFO Jim Scully spoke about the company’s nascent Madewell concept at the Wachovia Nantucket Equity Conference. The retailer will reach a “‘go or no go’ decision” on Madewell in the second half of this year, and Scully vowed that the concept won’t lose $15 million a year going forward. (That’s the amount J. Crew will lose in fiscal 2008 as it invests in Madewell stores and its new e-commerce site.) If it’s a “go,” Scully said, a ramp-up of Madewell wouldn’t occur until 2010, given real estate issues.

Madewell was launched in 2006, and it’s thus far had a conservative rollout, remaining firmly in R&D territory. According to last quarter’s J. Crew conference call, it caters to hip younger women, although some teens shop there, too.

There were eight total Madewell stores last quarter, and J. Crew plans two new ones in 2008. Madewell offers lower price points than its J. Crew concept, which might spell trouble for companies like Gap, Abercrombie & Fitch, and American Eagle Outfitters if J. Crew pursues an expansion. The new e-commerce site could theoretically threaten rivals, too, since its reach extends beyond a mere geographical footprint.

Some rivals may hope Madewell’s growth will be a “no go,” but I doubt they’ll be so lucky. After all, last quarter J. Crew said it was pleased with the concept’s performance. Management also mentioned that it’s particularly happy with Madewell’s performance in the $100 jeans business, even though that hardly seems like an ideal pursuit at present.

Link.

No Comments Related Topics: News, Retail, Trends |

Whitehall Jewelers files for Chapter 11

by David Bodamer June 30th, 2008

Whitehall Jewelers Holdings Inc. filed for Chapter 11 protection on Monday with an $80 million financing package that requires it to put its assets on the auction block in less than a month.

Whitehall, which recently acquired nearly 80 stores from another jeweler in Chapter 11 proceedings, said the terms of its $80 million bankruptcy loan require it to win bankruptcy court approval of a deal to sell its assets by July 18.

The Chicago company is asking the U.S. Bankruptcy Court in Wilmington, Del., for permission to hold an auction on July 16, at which it will consider “all alternatives regarding a disposition of substantially all of the assets.” Whitehall said such options include selling all or a portion of its business as a going concern or selling the rights to liquidate its inventory.

Link.

No Comments Related Topics: News, Retail |

Winn Dixie in Good Shape?

by David Bodamer June 30th, 2008

For years it seems like it’s been one piece of bad news after another for embattled grocer Winn Dixie. There were bankruptcies, store closings, etc. It seemed destined to go out of business completely, joining the ranks of many regional grocers. Despite it all, it’s held on. And now, in fact, the firm may have its ducks in a row and it is getting upgraded by analysts.

An analyst has upgraded Winn-Dixie Stores, citing the grocery-store chain’s stable competitive environment and plan to boost profit.

Analyst Karen Short boosted her rating on the Jacksonville, Fla., company to “Outperform” from “Market Perform” and her price target to $20 from $16. The new target implies she expects shares to jump 29 percent above Tuesday’s $15.50 close.

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Wal-Mart’s New Logo

by David Bodamer June 30th, 2008

Click to get a larger view.

walmart

The Wall St. Journal has the details.

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CMBS Update

by David Bodamer June 30th, 2008

Deal Junkie linked to two interesting stories last week on the state of the CMBS market. One from Bloomberg talked about how at the current pace, CMBS sales may fall to a 12-year low.

Commercial-mortgage backed securities offerings dropped to $12.2 billion in the first half of the year, from about $137 billion in the same period of 2007, according to JPMorgan Chase & Co. Analysts at the firm, Moody’s Investors Service and Royal Bank of Scotland Group Plc cut their forecasts. JPMorgan predicts sales will fall to $20 billion this year from the record $237 billion in 2007 and the lowest since 1996.

Secondly, another article from Bloomberg talked about CMBS are cheap and now may be the time to buy CMBS bonds.

No Comments Related Topics: Finance, Investment, News, Trends |

S&P: Hard Times Ahead for Commercial Real Estate

by David Bodamer June 30th, 2008

Via BusinessWeek comes some new analysis from Standard & Poor’s raising some caution flags about commercial real estate due to the weak economy.

Rather than pricing, it’s financial markets that are constraining development. Loans are more expensive and harder to get. In addition, securitization volumes remain very weak, though there are some signs of these flowing again after the total freeze late last year. It is always hard to tell how much of the decline in securitization is from a reluctance to borrow vs. a reluctance to lend, but this time around, the latter seems to dominate.

In dollar terms, offices are the largest component of commercial construction, and they’re often the most cyclical. This time, however, offices seem less vulnerable than usual. Apparently, the peak has come before developers managed to overbuild as much as they had in the past. In 2007, they built 215 million square feet of offices, well below the peaks in 2000 (298 million square feet) and 1985 (350 million). CB Richard Ellis reports that the vacancy rate for the first quarter was only 10.2% for downtown office space compared with 10.8% a year earlier. However, the vacancy rate for suburban space has edged up to 14.9% from the most recent low of 13.6% in the fourth quarter of 2006.

The vacancy rate data could be misleading. As in 2001, high levels of subleasing could be concealing vacancies. According to Grubb & Ellis, sublease space rose to 81.9 million square feet in the first quarter, up almost six million square feet in nine months. Much of the problem stems from a few major centers, particularly Orange County, Calif., where many subprime mortgage companies have closed up shop.

No Comments Related Topics: Commentary, Development, News, Retail Real Estate |