Archive for May, 2009

Wednesday’s News & Notes

by David Bodamer May 6th, 2009

Here are news and notes from around the Web today.

starbucks

No Comments Related Topics: Development, Finance, Investment, Mixed-Use, News, REITs, Retail, Retail Real Estate, Trends |

Changing the Format of the Blog

by David Bodamer May 6th, 2009

I’m toying with the format of the blog. Until now, many of the posts here have been links to single stories in which I’ve posted a handful of a paragraphs and a link back to the original story. But I think those kinds of posts are less interesting and I can accomplish the same thing through posting links to single stories to our Twitter feed. I’d like to turn the blog into something more analytical and provide commentary on stories. I’d also like to engage in more direct dialogue with readers of this blog.

So, what I’m going to do is post stories as I see them to Twitter and then post roundups of links to several stories at once to the blog once a day. Other posts here will include videos, Scribd documents, longer commentaries or posts with lots of links on a single topic–things that don’t make as much sense to post to Twitter. (For example, I’d like to do more posts like this one on store closures.)

No Comments Related Topics: Commentary, News |

Retailers Not Buying Rebound Talk

by David Bodamer May 5th, 2009

Despite some economists’ forecasts that the recession could be over by the end of summer, industry watchers say merchants are betting that it’s going to be 12 to 18 months before consumer spending gets even close to pre-recession levels.

That’s significant because no real rebound in the economy is possible without a pick-up in consumer spending, which accounts for two-thirds of economic growth.

“Anyone who thinks that consumers will return to carefree shopping by September, you have to wonder what they’re smoking,” said Paco Underhill, an expert on consumer psychology and CEO of retail-focused consulting form Envirosell.

Slashing orders: Merchants have dramatically slashed their orders for new merchandise that they expect to sell in the summer and later this year.

One sign of that, February’s volume of retail imports — such as clothes, shoes and home furnishings — dropped to the lowest level in seven years, according to the latest Port Tracker report from the National Retail Federation (NRF) and forecasting firm Global Insight.

Link.

No Comments Related Topics: Commentary, News, Retail |

Cost of Capital Bifurcating Business

by David Bodamer May 5th, 2009

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.

No Comments Related Topics: Commentary, Finance, Investment, News, Research, Video |

NY Firm Nabs Filene’s Space

by David Bodamer May 5th, 2009

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.

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

What’s Sears Up To?

by David Bodamer May 5th, 2009

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.”

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

Catching Up on Store Closures

by David Bodamer May 5th, 2009

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 »

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

Another CRE-Related Bankruptcy

by David Bodamer May 5th, 2009

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.

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

News and Notes

by David Bodamer May 5th, 2009

Here are some good articles and news items from the past seven days to check out if you haven’t already seen them.

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

Playing a Big Game of Catch-Up

by David Bodamer May 5th, 2009

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.

No Comments Related Topics: News |