Archive for January, 2009

Westfield Says Assets Depreciated $3B in 2008

by David Bodamer January 29th, 2009

Westfield Group Ltd shares were down more than six per cent after the retail property investor flagged that its shopping centre assets would depreciate by $3 billion in its full year results for calendar 2008 because of an increase in capitalisation rates.

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“It is expected that the group’s IFRS result for 2008 will include a reduction of approximately $3 billion in the value of the group’s shopping centre assets due principally to an upward movement in capitalisation rates,” Westfield said.

“However the total value of the group’s assets as at 31 December 2008 is anticipated to exceed the $50.4 billion reported as at 30 June 2008, primarily as a result of the effect of the strengthening US dollar on the value of the group’s US assets.”

Westfield managing director Steven Lowy acknowledged the group was “not immune from macro-economic factors”, telling the The Australian Financial Review that the effects of the financial crisis on them was in line with what has been happening around the world.

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“For the 12 months to 31 December 2009, assuming no material changes in currency exchange rates or economic conditions, the group expects to earn operational segment earnings per security in the range of 97 cents to 100 cents,” Westfield said.

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No Comments Related Topics: International, News, REITs, Retail Real Estate |

Starbucks Closing 200 More U.S. Stores

by David Bodamer January 29th, 2009

The economic crisis is eating into high-end coffee consumption, as Starbucks found out in its fiscal first quarter.

In earnings just released, the coffeemaker said it would lay off up to 6,000 employees at its stores and let go another 700 non-store employees, half of which would come at the company’s Seattle headquarters.

Also, Starbucks said it would close 200 U.S. and 100 foreign stores. This comes in addition to the shuttering of 661 stores announced last year. Most stores are expected close this year.


Link.

Bankruptcies and Liquidations:

Potential Bankruptcies & Liquidation Impact: 999 stores

Announced Closings

Total Closings: 634 stores

Potential Impact of All Announcements to Date: 1,633 stores

No Comments Related Topics: News, Retail |

2009 is a Year to “Hang On and Stay Alive”

by David Bodamer January 28th, 2009

Senior real estate executives are predicting more pain for the industry in 2009, with one professional warning 2009 was a year to “hold on and stay alive”.

The US Real Estate Roundtable, in its latest industry sentiment survey, revealed that a majority of the 130 executives it interviewed expected the first six months of 2009 to be “very painful”, with hospitality and retail particularly hit.

Although some professionals believed the US property markets would “bottom” out in the second half of the year, one investment bank real estate head told the industry lobby group: “The second half of 2009 will not be as painful as the last few months. 2009 will be a year for muddling along, and the true rebound will begin in 2010.”

Link.

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

Department Store Sales May Hurt Discounters

by David Bodamer January 28th, 2009

You might not know it from the numbers. Most of the higher-end department stores such as Saks, Nordstrom and Neiman Marcus reported double-digit declines in same-store sales for December. By that measure, TJ Maxx and Marshalls, both owned by TJX Cos., more than held their own with flat December sales. (Loehmann’s and Filene’s don’t report monthly sales.)

But some analysts say sales figures at TJ Maxx and Marshalls might even have been up if these discounters hadn’t faced such stiff competition from department stores. “Because you were able to buy stuff as cheap if not cheaper at department stores, that did have a dampening effect on TJX’s sales,” Slater says.

There’s another factor working against discounters. Normally in a recession, consumers searching for the best deals flock to discounters – and when an excess supply of goods piles up at department stores, the discounters can often scoop up first-run merchandise, as opposed to stocking last season’s fashions.

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No Comments Related Topics: News, Retail |

RREEF Revisits 2008 Forecast

by David Bodamer January 27th, 2009

Square Feet points out a very interesting exercise undertaken by RREEF. The company has taken its 2008 Outlook and marked it up to see how its predictions fared against reality. You can view the results below.

RREEF 2008 Outlook Markup For 2009

No Comments Related Topics: Commentary, Investment, News, Research, Retail Real Estate, Scribd |

Darden Scales Back Expansion Plans

by David Bodamer January 26th, 2009

This fiscal year, Darden plans to open 68 to 72 new restaurants — a number that the Orlando-based company had previously decreased from original plans calling for between 75 and 80.

In 2010, the number of new restaurants is expected to drop to between 53 and 65, executives said. Darden spokesman Rich Jeffers called the numbers “very preliminary.”

LongHorn Steakhouse and Red Lobster are expected to open fewer new restaurants in 2010, while net new units for Olive Garden, Capital Grille and Bahama Breeze openings will stay about the same as this year. Seasons 52 will likely have more openings — two or three, compared with one planned this year.

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No Comments Related Topics: News, Retail, Trends |

Robo-Mall Cop

by David Bodamer January 26th, 2009

This isn’t the first time we’ve heard about Japan experimenting with robot security guards at malls. But this new approach seems even more unusual–especially with the robot’s Spider-man like web.

robomallcop

Japanese researchers in Tokyo on Wednesday unveiled a robotic mall cop, a two-foot-high security guard on wheels that can track down bad guys running amok on commercial property and disable them with a ‘Spider-Man’ like web.

Named the T-34, possibly after the legendary Soviet tank of World War II, the little blue guy on wheels weighs about 25 pounds and has a top speed of about 6 mph — not quite as fast as Paul Blart’s Segway.

“We have basically designed the robot for corporate use and we expect private security companies to buy them instead of using human guards, but there will also be those tailored for use in homes,” Tmsuk Co.’s Mariko Ishikawa told London’s Daily Telegraph.

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No Comments Related Topics: News, Quirky, Security |

Mall of America Revises Expansion Plans

by David Bodamer January 26th, 2009

After failing three times to get the public financing it wanted to pay for part of a $2 billion expansion, the Mall of America won’t be making another pitch to the Legislature this year.

Instead, it’s considering building the 5.6-million-square-foot project in phases, with a first phase of about 3 million square feet that could be done by 2013. The rest would be delayed indefinitely.

The change could allow the mall to tap a modified subsidy package passed by the Legislature last year that authorizes the city of Bloomington to impose new taxes to help fund the project. “It’s not enough to support 5.6 million square feet at one time,” said Kurt Hagen, vice president for development at Triple Five Corp., the mall’s owner. The public financing is for a parking ramp and other infrastructure improvements, not for the mall itself.

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

Home Depot Cutting Jobs, Closing Stores

by David Bodamer January 26th, 2009

Home Depot Inc. plans to eliminate 7,000 jobs while closing four dozen stores under its smaller home improvement brands as the recession continues to batter the nation’s housing market.

The company said Monday the cuts will affect about 2 percent of the company’s 300,000 workers and cause the Atlanta-based chain to record a $532 million pretax charge, most of which will be recorded in the fourth quarter.

Most of the cuts affect workers at Home Depot’s 34 Expo Design Centers, five YardBIRDS, two Design Centers and HD Bath, a bath remodeling business with seven sites.

Those stores will close in the next two months.

Link.

Bankruptcies and Liquidations:

Potential Bankruptcies & Liquidation Impact: 999 stores

Announced Closings

Total Closings: 434 stores

Potential Impact of All Announcements to Date: 1,433 stores

No Comments Related Topics: News, Retail, Trends |

Few White Knights Emerge for Bankrupt Retailers

by David Bodamer January 23rd, 2009

“For retailers, bankruptcy is like a roach motel — they can go in, but they won’t come out,” said Evan Flaschen, chair of the Financial Restructuring Group at Bracewell & Giuliani LLP. “There are very few people buying these businesses in order to reorganize them. The people who want to buy them now are the ones most realistic about the liquidation value,” Flaschen said.

While retailers like Federated, Macy’s and Kmart were able to reorganize or sell themselves in bankruptcy in decades past, recent attempts to sell bankrupt retailers at auctions have met financing difficulties, wavering buyers, uncertain economic conditions and weak support from critical suppliers.

Deals to rescue retailers Goody’s Family Clothing, Steve & Barry’s and Tweeter ended in liquidation after a second trip to bankruptcy court. And even the buyers of Boscov’s Inc — one of the only major retailers to successfully sell itself in Chapter 11 last year — struggled to line up financing in the days before the deal closed.

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No Comments Related Topics: News, Retail, Trends |