Not to throw cold water on the positive results expected for this year’s Black Friday and holiday sales, but it’s useful to reflect and review who is struggling, closing and making efforts to survive in a world of retail chaos. Here’s the latest on US retail closures.
Bankrate looks at seven major US retailers and their plans for store closures. Shopping center group General Growth Properties, bought five Macy’s stores for $48 million amid plans to minimize impact on their shopping center assets. As Dick’s Sporting Goods absorbs Golfsmith, 60 US stores will close. Watch and accessories retailer Fossil will close some of its 610 international stores though numbers have not yet been released.
Office Depot continues plans to close 300 stores over five years including 65 in 2016 Q4. American Apparel may be planning a second bankruptcy after missing a $2.5 million payment to creditors. Performance Sports Group, maker of Bauer hockey and Easton baseball gear, announced bankruptcy plans.
106-store regional department store chain Gordmans is struggling as its sales dip and share price drops. Starbucks CEO Howard Schultz comments on the “Amazon effect” of online sales, a radical shift in consumer foot traffic patterns and it’s impact on retailers. Former Borders CEO Mike Edwards shares a valuable perspective, lessons and insight into the final days of its bankruptcy.
8 Retail Chains Closing Stores In 2016 | Bankrate.com
Macy’s, the nation’s largest department store, announced last week it will closed 100 stores, the latest in a series of moves by retailers to stave off financial struggles. As more shoppers flock to the convenience of e-commerce, brick and mortar stores are shuttering their doors nationwide.
We take a look at 7 retailers, in addition to Macy’s, that have announced store closings this year. Via bankrate.com
Mall Landlords Dive Deeper Into Retail Assets
The largest mall and strip center landlords in the U.S. are trying to combat a wave of store closures by dipping into their own pockets.
Some are acquiring retailers outright, while others are buying up space from department stores and snapping up other retail locations.
Chicago-based General Growth Properties, the second-largest real-estate investment trust by number of properties, said it bought five stand-alone stores from Macy’s Inc. for $48 million since the beginning of the third quarter. Via wsj.com
Fallout from bankruptcy auction continues as nearly 60 Golfsmith stores set for closure
Some 59 Golfsmith stores from Oregon to Massachusetts are set to close in the next few months as the next step in the purchase of Golfsmith by Dick’s Sporting Goods rolls into form.
The news was confirmed early this week that Dick’s had purchased Golfsmith for a reported $70 million at a bankruptcy auction, a deal that included the liquidation of all but 30 of Golfsmith’s current 109 stores in the U.S. Previously, Golfsmith already had identified 20 stores it was closing. This latest release was announced by liquidation firms Hilco Global, Gordon Brothers and Tiger Capital, and according to the release there will be discounts of up to 30 percent, including the entire stock of “famous maker golf equipment, including the newest models.” According to the release, some $80 million worth of golf merchandise will be available.
Among them is the 40-acre Austin, Texas, campus and first retail store, a 30,000-foot retail location that opened in 1992. That served as the company’s headquarters and included 240,000 square feet of shipping and distribution facilities, as well as club-building workshops and an extensive driving range that was used as a teaching facility and in product development for the company’s private-label brands. Via golfdigest.com
Fossil shuttering stores, streamlining product offerings
Watch and accessories retailer Fossil is planning to close stores in light of falling traffic, also making moves to streamline its product offerings.
Fossil operates 610 stores worldwide, including 284 in the U.S. The company didn’t detail how many locations will close.
Fossil additionally said it will produce more than 20 hybrid smart watches that can track physical activity and alert users to incoming phone calls or text messages. Via retaildive.com
Office Depot to close 65 stores in Q4
Office Depot shares increased as much as 15% Thursday after the office supplies retailer announced an aggressive cost-cutting effort that includes closing 300 stores over three years, including 65 locations in the fourth quarter, as well as the sale of its international businesses.
Office Depot bested third quarter expectations with earnings of 16 cents per share, topping analysts’ estimates of 15 cents per share. Revenue decreased 7% from the same quarter last year from $3 billion to $2.84 billion, however, missing Wall Street’s estimates for $3.49 billion.
Total adjusted sales slipped 4% compared to the prior-year quarter, and same-store sales declined 2% on lower transaction counts. For the fourth quarter, Office Depot said it expects total revenue to fall shy of the $3.48 billion recorded in Q4 2015, missing expectations for revenue of $3.44 billion. Via retaildive.com
American Apparel misses $2.5M in bankruptcy payments
As American Apparel reportedly readies itself for a second bankruptcy in a little over a year, the struggling retailer must still contend with the terms of the reorganization plan approved in February. Since then, the retailer has continued to struggle with sales, and former CEO Paula Schneider stepped down last month amid reports the retailer might move some of its operations overseas. Schneider recently joined Delta Galil as the CEO of DG Premium Brands.
Since emerging from bankruptcy as a private company under the watch of bondholders led by Monarch Alternative capital, American Apparel has brought in strategic advisory firm Berkeley Research Group to oversee its restructuring efforts, according to a report from Debtwire.
American Apparel may need to file for Chapter 11 again to be allowed to stanch the bleeding by exiting leases and other obligations. Such a move could also make it more appealing to a buyer. Brand licensors Authentic Brands Group LLC and Iconix Brand Group Inc. have expressed interest in an acquisition, indicating that, despite its problems, its brand remains strong. Via Retail Dive
Hockey, baseball gearmaker Performance Sports files bankruptcy
The maker of Bauer hockey gear and Easton baseball equipment filed for Chapter 11 bankruptcy protection Monday after its accounting came under scrutiny, baseball bat sales slumped and retail chain Sports Authority liquidated.
Exeter, N.H.-based Performance Sports Group said Monday that it had filed for protection from its creditors in federal court in Delaware and through a similar process in Canada.
The company lined up a “stalking horse” bid, or leading offer, to set the bar for an open auction of its assets. The $575 million bid came from an affiliate of Sagard Capital Partners and Fairfax Holdings. Sagard is its largest shareholder at 16.9%. Performance Sports also secured access to $386 million in bankruptcy loans, known as debtor-in-possession financing, to continue operating and paying employees. Via usatoday.com
Falling stock could put Gordmans, jobs at risk; company has 180 days to turn it around
Over the past year, Gordmans’ stock has slid so far that it’s now below the $1-per-share mark required by the Nasdaq market, where the stock is traded.
Investors might be shying away from the Omaha-based retailer’s poor sales so far this year and a retail industry plagued by tough online competition and steep discounts that cut into profits.
Gordmans this week received a “deficiency letter” from Nasdaq, saying that if the stock doesn’t rise above the $1-per-share requirement by May 1, it will be delisted from the exchange. That would put it in the realm of “penny stocks” — highly speculative stocks that carry more risk and aren’t frequently traded by average investors, or by big mutual funds. Via omaha.com
Mass-Merchandise Retailers Report This Week: For Whom The Bell Tolls?
To start off a quick preview of expected financial results of the mass-merchandise retailers reporting this week, Kohl’s (NYSE:KSS), Macy’s (NYSE:M) and Nordstrom’s (NYSE:JWN) I thought I’d cut-and-paste Howard Schultz’s comments (Starbucks CEO) on the state of mall traffic as quoted on Starbucks quarterly earnings results conference call last week:
“I would label this time as just a high degree of uncertainty that obviously is domestically driven but has affected the rest of the world. … I don’t think we’ve ever witnessed such concern about what could happen in the U.S. as a result of the election. And I think there’s no question as I speak to other retailers and other merchants both in and out of our sector, there isn’t one exception where everyone is experiencing I think a very unpredictable and erratic chain of events. It’s very hard to cut through all of the noise and try and get access to the customer and try and get your message out. I think everyone is hoping that post-election there will be a return to a natural state of affairs in terms of consumer behavior.
“But I think there’s another issue on the table that we have not yet discussed that I talked about three years ago and that is the seismic shift in consumer traffic. I was talking to [FedEx CEO] Fred Smith just a couple of weeks ago about his situation at FedEx and he shared with me a piece of research which showed a significant drop in foot traffic on ‘Main Street’ and in malls not only domestically and around the world as a result of e-commerce, the web and what I’ll loosely describe as “the Amazon effect.” As a result of that you’re certainly seeing large companies and small companies not only not open new stores but announce closures. Via seekingalpha.com
Inside the final days of Borders’ bankruptcy
When Mike Edwards stepped onto his flight from New York back to Ann Arbor, Michigan, in July 2011, he was the still CEO of the second-largest bookstore chain in the U.S. But the 40-year-old retailer was crumbling fast beneath his feet.
Edwards was in New York that day to submit a plan of reorganization and refinancing for Borders Group Inc. to a bankruptcy judge. Since filing for Chapter 11 bankruptcy in February 2011, Edwards spent months courting investors, asking them to throw Borders’ sinking business a buoy of capital.
The deal was 90% done, Edwards thought in the days leading up to that flight. But at 5 p.m. the day before he was going to meet the judge, the CEO found out he would need to file an altogether different document: a plan for liquidation. Via retaildive.com
Will holiday sales save some retailers?
The big question is whether strong bricks and mortar and online holiday sales will save retailers or prevent others from uncertain futures. We’ll keep an active watch on the retail industry for you, so check in regularly for more news updates or subscribe at the top of this page to get Cashback Industry News in your inbox three times a week (Mon-Wed-Fri mornings).