Here is a video from one of our sister publications, Business Finance, looking at how companies with low costs of capital are outmaneuvering companies with high costs of capital. It makes a lot of sense in a climate like this where lining up financing is difficult. The video features Ajit Kambil, Global Research Director, Deloitte’s U.S. CFO Program.
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Archive for May 5th, 2009
NY Firm Nabs Filene’s Space
New York’s Crown Acquisitions, with the Chetrit Group as its partner, has bid $22 million for the stores, which it would continue operating under the Basement name. Its offer will be considered as part of an upcoming court auction during which competing bids for the Burlington-based chain’s stores and assets will be fielded.
“It’s a good opportunity to have a rejuvenated company with new management,” said Alan Cohen, the Basement’s chief restructuring officer. All stores will continue operating in the meantime.
The storied chain, known for its automatic markdown system at Downtown Crossing and annual “Running of the Brides,” was started by Edward Filene in 1909 to sell excess merchandise from Filene’s, his father’s full-price department store upstairs.
Its bankruptcy filing came two weeks after former owner Retail Ventures Inc., which purchased the chain out of bankruptcy in 2000, offloaded it to an affiliate of the Buxbaum Group, a California turnaround and liquidation firm.
Link.
What’s Sears Up To?
In today’s Chicago Tribune, a story looks at Sears’ ever changing strategy. Is Edward Lampert thinking excess space? The company apparently is adding staff to its real estate division. The company has 200 million square feet of space. That’s a lot to try and backfill if that’s what Lampert’s thinking. Seems like Sears should have tried to move this real estate a few years ago if that’s what it is up to.
Sears Holdings Corp. Chairman Edward Lampert regularly takes heat from investors for failing to articulate a strategy. And once again at the company’s annual meeting — the only time he speaks publicly to investors — he provided little insight into Sears’ direction.
But he had plenty of ideas on how to keep Sears going through the toughest retail downturn in decades.
The billionaire investor and majority Sears stakeholder is concentrating these days on how to make about 200 million square feet of retail real estate space “more productive,” he told shareholders Monday. He has been adding jobs in Sears’ real estate department, while cutting hundreds of jobs elsewhere, in hopes of finding tenants to lease space inside the retailer’s stores. He also has reorganized the company so each store is held accountable for the categories it sells and the profits it makes. And he is testing an initiative in which massive stores are transformed into drive-up warehouses.
While the steps don’t add up to a strategy, it may not matter in these economic times, said retail consultant Neil Stern.
“The one real advantage Sears has right now is in the downturn, when it is all about cost-cutting, expense control and inventory management, these are things Lampert is really good at,” said Stern, a partner at McMillan Doolittle in Chicago. “The rest of the retailers are learning these skills, and that’s what Sears does very well.”
Catching Up on Store Closures
Things were quiet for a while on the store closure front. But last week Jones Apparel Group said it would shutter 225 stores. In more positive news, however, C&S Wholesale Grocers won an auction and will buy all 56 Bruno’s locations. Bruno’s had previously filed for Chapter 11 and it was possible there could have been store closures there. But C&S says it plans to keep all the locations open.
So where does this leave us for the year? Read the rest of this entry »
Another CRE-Related Bankruptcy
Did General Growth open the floodgates? It’s been by far the biggest commercial real estate bankruptcy, but the list of other firms being forced to reorganize is growing. Three subsidiaries of Lauth Property Group are seeking Chapter 11 bankruptcy protection. About two weeks ago it was Sheldon Good & Co. and Opus South. Are these debt-related bankruptcies (i.e., the result of the inability to roll over finance) or are these stemming from operational difficulties? It’s unclear what the case with Lauth is. With Sheldon Good, there seem to be some shady things that occurred behind the scenes.
News and Notes
Here are some good articles and news items from the past seven days to check out if you haven’t already seen them.
- May 4, New York Times, A Final Bargain at Filene’s: The Stores, in Bankruptcy
- May 4, LLenrock Group, REIT M&A?
- May 4, Chicago Business, Filene’s selling Chicago sites to Sears Tower owner as it files for Chapter 11
- May 4, NREI, Will TALF Expansion Jumpstart CMBS Lending?
- May 2, New York Times, How Lehman Brothers Got Its Real Estate Fix
- May 2, Financial Times, Westfield to cut service charges at U.K. properties
- May 2, Deal Junkie, Weekend Roundup
- May 1, CIRE, Retail’s New Reality
- May 1, NREI, Distressed Deals Losing Luster
- May 1, Marketwatch, Fed to launch program bolstering commercial loans in June
- May 1, Deal Junkie, Landmines in Commercial Real Estate
- April 30, Motley Fool, ON THE BRINK: 15 Real Estate Firms Going, Going…
- April 30, Houston Chronicle, Wal-Mart gives its Supermercado concept a tryout
- April 30, Reuters, Westfield buoyed by rising mall income at home
- April 29, Reuters, ING favours U.S. real-estate trusts despite crisis
- April 29, NJBiz.com, Rosetta Stone opens doors at the mall
- April 28, UPI, Walgreen to buy 34 New Jersey stores
- April 28, AP, Starbucks to broaden appeal by expanding lower-priced, milder-tasting Seattle’s Best Coffee
- April 25, Retail News Blog, Cap Rates on the Rise for Walgreens
Playing a Big Game of Catch-Up
I’ve been away for a few days and a lot has happened. I’m going to approach this by doing some longer round-up posts with lots of links and then a couple of shorter posts with comments. Also, I’ve been updating our twitter page. So that’s a good place to keep tabs on brief news bites.
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Retailers Not Buying Rebound Talk
by David Bodamer May 5th, 2009
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