patrick.net

Retail was, and still is wildly overbuilt. This was true even before the internet. Everybody knows this, as there is not one of you who has passed by a store and wondered how the hell they stayed opened. When new stores, even decades ago, at least since around 1995, but probably much earlier. Possibly an overreaction to the 1950's where if you lived in suburbia, you had to go downtown to shop.

FortWayne says

Liberals fucked it up

Your fucking team has been in control of all three branches of government for five months. Honey, if it's the government's fault that retail is failing, then republicans fucked up. When the democrats were in control, they created millions of jobs and undid that depression you republicans created last time.

Dan8267 says

Your fucking team has been in control of all three branches of government for five months. Honey, if it's the government's fault that retail is failing, then republicans fucked up

You can't undo decades of damage in 5 months. It's going to take Trump two full terms, or longer.

Booger says

You can't undo decades of damage in 5 months.

Your thinking of the mess that Bush left Obama.

Obama, despite all his numerous flaws, didn't fuck the economy. The republicans tried to fuck up the economy repeatedly by sabotaging it to make Obama look bad. We have them on tape discussing their plans to ruin the economy. Despite that, democrats fixed what republicans broke.

What's funny is that Democrats & Republicans in the Big Club have their voters thinking that their brilliant elected officials give a damn.

"Hey voters,suck it,we are for this term."
"We'll tell you more lies,that you will believe,as soon as we announce we are running again."
"Hell ,we will lie to you anytime."
"We can't believe how stupid people are."

All you false paradigm trolls have your nose so far up your own ass, you can't tell logic from your own farts anymore. Retail is down because the economy was, is, and will continue to be in recession. What happens in recession? People sure as fuck don't drop money at every Sports Authority, Circuit City, or Sears they see, because they're misc budget has shrunk significantly. Same goes for eating out, where restaurants have also seen a huge decline in profits.

The free market has a way of weeding out bad business's sooner or later. If you have a needed product or service, you'll survive, the rest...

jvolstad says

I will miss Radio Shack.

Radio shack has been RCA cord and Cell Phone Shack for years.

HEY YOU says

""Barely a quarter into 2017, year-to-date retail store closings have already surpassed those of 2008."

jazz music says

Job creation statistics are going to soar after they lay everybody off again!

So what if retail stores are shutting down. They should shut down if no one wants to shop there.

It's the Internet, fools! When I can order some shit on Amazon as soon as I realize I need it, without taking time to go shopping, and have it delivered to me that night, the world just changed.

These days anyone can have a store on Amazon, selling whatever crap you want! It can all be built in China, sourced and shipped to Amazon warehouses, and held in their stock until a customer buys it. Sure, Amazon is going to take a steep cut of your profits, but your overhead is practically nothing! Just organize a virtual "shop," take some pictures of your crap, and deal with customer support. The ease of this model for both buyers and sellers is what's killing the brick and mortar retail industry.
Those were never good jobs anyway.

Quigley says

These days anyone can have a store on Amazon, selling whatever crap you want!

Even better, you can have a store on Shopify to use your own domain name and buy from Alibaba to buy Chinese goods in bulk to resell.

Cut Amazon out of the picture too, lol!

I visited the last Radio Shack open in San Antonio. Hoping to find a deal on test equipment. The pickings were pretty slim.

jvolstad says

I visited the last Radio Shack open in San Antonio. Hoping to find a deal on test equipment. The pickings were pretty slim.

I visited the last one in my home town before it closed. Bought an HDMI cable, significantly marked down, thinking maybe I got a deal.
Checked on Amazon that night for comparison. Nope. Not a deal. Amazon was cents cheaper.

I went looking for Bumble Bee capacitors, EL34 tubes and resistors, I forgot they don't actually cary electronic components anymore. Maybe that's why they are closing.

It's no accident that Radioshack quit feeding young Scientists and Invetors minds around the sametime the investors were taking manufacturing of electroinc brands abroad.

Truly, the fact that Amazon has nearly double the value of Walmart is completely Trump's doing in the past 6 months.

rando says

Even better, you can have a store on Shopify to use your own domain name and buy from Alibaba to buy Chinese goods in bulk to resell.

American COMMUNISTS hate American jobs & love outsourcing.

Quigley says

selling whatever crap you want!

Americans will surely but it.

Rew says

I visited the last one in my home town before it closed. Bought an HDMI cable, significantly marked down, thinking maybe I got a deal.

Checked on Amazon that night for comparison. Nope. Not a deal. Amazon was cents cheaper.

You can usually get a good deal with Amazon Basics cables.

Radio Shack catalogs. Pretty cool.

http://www.radioshackcatalogs.com/html/index_general.html

who's taking over?

freespeak says

America is over and everyone knows it. The New World Order has a dying empire odor and changing the channel ain't going to make this go away.

I really think the biggest problem with indoor malls is that the anchor tenants are places that nobody wants to shop anymore. Nobody goes to Sears, JcPenny, Macy's, etc. If WalMart and Targets were OK with putting their stores into shopping malls (along with grocery stores) then malls would probably be doing fine. I used to live a few blocks away from an indoor shopping mall that even had a post office station that took packages and had PO boxes. It was open during your typical after work hours a few days a week, and yes there was always a line there.

The lenders have to collect to bring down the Empire.
How do you propose they go about it without getting themselves blown to bits?
BlueSardine says

who's taking over?

freespeak says

America is over and everyone knows it. The New World Order has a dying empire odo

Inventory Pileup Sounds Alarm for Goods-Based Economy

"In 30 years, I’ve never seen anything like this”: CEO of warehouse operator Pacific Mountain Logistics.

Sales at merchant wholesalers (except manufacturers’ sales branches and offices) fell 1% in December 2018, compared to November, to $497.2 billion on a seasonally adjusted basis, and inched up only 1% compared to December 2017, according to the Census Bureau estimates this morning.

But inventories at these wholesalers rose 1.1% from November and jumped 7.3% from December 2017, to $661.8 billion. Over the two-year period through December, inventories have risen 11%. This includes inventories of durable and non-durable goods (we’ll look at them separately in a moment):



This surge of inventories on soft sales caused the inventory-to-sales ratio so spike to 1.33, up from 1.30 in November and up from 1.25 a year earlier.

This is a familiar pattern. As inventories are piling up, and as inventory carrying-costs rise, companies eventually react: They whittle down their inventories by cutting orders. As we have seen in 2015 and 2016, this hammers the goods-based sectors of the economy. In 2016, it dragged GDP growth down to just 1.6%, the worst growth rate since the Great Recession. The overall economy was barely kept out of a recession by the service sector.

The transportation sector tracked this perfectly as it fell into a steep recession in 2015 and 2016. Now a similar pattern is starting to form: A surging inventory-to-sales ratio as inventories are piling up, while shipment volume of goods, as tracked by the Cass Freight Index, have started to decline on a year-over-year basis.

I overlaid the two data sets: The Cass Freight Index for Shipments, expressed as percent change from the same month a year earlier (columns, left scale), and the inventory-to-sales ratio (green line, right scale):



Non-durable goods not helpful.

Sales of non-durable goods — food, gasoline, apparel, agricultural products, etc. – at wholesalers fell 1.4% year-over-year in December, even as inventories ticked up 2.2% to $251.2 billion.

The standout here is the category of petroleum and petroleum-products inventories. Inventories and sales are valued in dollars, and the sharp drop in crude oil prices since August caused the dollar amount of petroleum and petroleum-products inventories to drop 12% year-over-year in December. Between September and December, inventories plunged 21% in dollar terms to $20.4 billion.

The problem is in Durable Goods Inventories

Sales of durable goods by wholesalers ticked up 3.5% year-over-year in December to $245.6 billion. But inventories of durable goods at wholesalers surged 10.6%, to $410 billion – the steepest increase since 2012, the period of inventory restocking coming out of the Great Recession:



Here are some standout categories, in terms of percent change in December 2018, compared to December 2017. Note the three categories with double-digit jumps, two of them relating to the construction sector:

•Furniture & Home Furnishings: +8.9%

•Motor Vehicle & Motor Vehicle Parts & Supplies: 7.3%

•Machinery, Equipment, & Supplies: 12.7%

•Hardware, Plumbing & Heating Equipment & Supplies: 12.1%

•Lumber & Other Construction Materials: 14.9%

•Household Appliances & Electrical and Electronic Goods: 6.5%.

The chart below compares the year-over-year percent change in durable goods inventories at wholesalers to the year-over-year percent change in the Cass Shipments Index. Note the turning point in shipments late last year. Inventories follow with a lag.



This situation of ballooning inventories on soft sales is showing up in the warehousing industry – and it’s getting blamed on companies trying to front-run trade tariffs. The surge of imports ahead of the potential tariffs – coming on top of the usual pileup of inventories ahead of the Chinese Lunar New Year – has left warehouses and shipping terminals in Southern California “overstuffed and distribution networks jammed,” the Wall Street Journal reported.

“That stacked-up inventory is straining logistics capacity around the neighboring ports of Los Angeles and Long Beach, which together comprise the biggest U.S. trans-Pacific gateway,” the WSJ. It quoted BJ Patterson, CEO of warehouse operator Pacific Mountain Logistics in San Bernardino: “In 30 years, I’ve never seen anything like this,” he said.

Increasing inventories is counted as a business investment and is added to GDP growth; This is what has been happening much of last year. But conversely, the inevitable decline in inventories will be subtracted from GDP growth.

Apocalypse not now

The goods-based sectors comprise the smaller part of the economy. The services sectors dominate. The biggest of them are healthcare, finance, and housing (rents are services). In the US, you cannot get an overall recession with just the goods-based sector slowing down, as we have seen in 2016. It will pull down overall growth in the economy but won’t push the US into a recession. For a recession to happen in the US, the services sectors need to approach the zero-growth line, while the goods sectors are in decline – and that is not yet in sight.

Something has to give.

https://wolfstreet.com/2019/02/25/inventory-pileup-sounds-alarm-for-goods-based-economy/

Can you compete with amazon? Retail is poor investment choice these days. Amazon is too far ahead.

Inventory is a manufacturing waste because it is value that is being held at a cost.

In the most literal sense, Inventory is valuable product or material that is waiting either to be sold to the customer or further transformed into something of greater value.

The entire time a product sits in Inventory, its profit margin is reduced because overhead must be paid to maintain the product in Inventory.

Maintaining Inventory requires the addition of Motion and Transportation wastes.

You know nothing about inventory dude

Kakistocracy says

Inventory is a manufacturing waste because it is value that is being held at a cost.

In the most literal sense, Inventory is valuable product or material that is waiting either to be sold to the customer or further transformed into something of greater value.

The entire time a product sits in Inventory, its profit margin is reduced because overhead must be paid to maintain the product in Inventory.

Maintaining Inventory requires the addition of Motion and Transportation wastes.

Kakistocracy says

Motion and Transportation wastes

6. Moving

Moving product costs money, which is why Transportation is classified as a manufacturing waste category. Unless value-added transformation is performed to the product or material during transport, the Transportation of a product or material is wasteful activity. Great amounts of resources and time are consumed moving material while no value is being added to sell to the customer. Transportation leads to increased Motion lean waste because resources are required to move without generating value.

7. Motion

When Motion occurs, value is not added to a product or material being manufactured. Motion can be either people or machine, but is most often a human resource whose effort and time are being wasted. Inefficient shop floor layouts, and improper equipment can contribute to unnecessary motion. The employee’s efforts are not only being wasted, but Motion can also result in physical injury to employees which results in even greater cost to the business. Motion waste is closely related to wasted employee potential, commonly referred to as Non-Utilized Talent.

No surprise, brick and mortar has been losing to online for a decade or more now. Sears/K-Mart, Dick's Sporting Goods, JCPenney/Marshall's, etc. all in trouble long before Trump. A long term trend.

Maybe - but if you do it right you can fight Amazon. Walmart seems to be fairly successful with their online sales.
https://www.cnbc.com/2019/02/19/amazon-isnt-killing-walmart-online.html

You just need to execute...

FortWayneIndiana says

You know nothing about inventory dude

Enlighten me - can't wait to read this. Please - I'm bored

Going to go out on a limb here and guess no exposure to Lean Manufacturing or Continuous Improvement aka 改 善

When addressing one's elders Mr. Dude is considered proper etiquette

Per chance a bit too long in SoCal - with the "dude" thing

2019 Store Closures Likely to Match 2018 Levels. - Store Closures Coming in 2019, but Don't Call It a Retail Apocalypse Yes, retail chains are closing stores, but you need to look at why to understand what's really happening.

Overall retail vacancy is likely to remain flat, but sizeable store closures will likely continue.

Despite headline-making store closings by Sears, Bon-Ton, Kmart,and others over the past few months, U.S. shopping center and mall owners have been working hard to hang on to tenants. However, they are likely gearing up for another challenging year as more store closures are anticipated in 2019.

Research firm Reis Inc. reported that the overall U.S. retail vacancy rate in the fourth quarter of 2018 remained flat at 10.2 percent. The vacancy rate are regional and superregional malls dropped slightly to 9.0 percent from 9.1 percent in the third quarter, which marked a seven-year high.

Given the many store closures across the U.S., the minimal changes in vacancy rates show how the retail sector has withstood the structural changes in the industry, Reis’ report noted.

“Many feared that vacancy rates would soar and rents would plummet. This did not occur as the doomsday prognostications proved to be overblown,” Reis researchers noted.

“The apocalypse is overblown,” says Barbara Denham, a senior economist at Reis.

However, Reis warns that more stores are expected to close in the coming months, and the industry continues to face a number of headwinds, including growth in online shopping.

Bankrupt department store chain Sears’ fate remains in question and a liquidation is still possible, meaning hundreds more Sears and Kmart stores could shutter. That’s in addition to 100-plus locations already being closed. The fate of companies like Gap, Neiman Marcus and J.C. Penney is also uncertain.

But “if the retail sector was able to sustain the store closures over the last year, it can survive anything,” according to Reis.

“In short, it seems as though the worst is behind us,” Denham says, adding that Reis expects retail vacancy rates to hold steady in 2019.

But that’s not to say there aren’t still going to be challenges, more closures and bankruptcies this year.

What do current numbers say?

After a record 7,000 U.S. store closings in 2017, closings fell to 5,524 in 2018, according to retail think tank Coresight Research.

Year-to-date in 2019, U.S. retailers have announced 1,674 store closures and 1,380 store openings, Coresight reports. For the same period last year, Coresight reported announcements of 1,768 store closures and 1,510 store openings.

Who’s closing?

Roughly 21 bankruptcies of major retailers were filed in 2017, including Toys ‘R’ Us, followed by about 16 in 2018, including Sears and Bon-Ton Stores. So far in 2019, ShopKo and children’s apparel retailer Gymboree have filed for Chapter 11. Shopko announced that it will close 38 additional stores as part of its reorganization, while Gymboree plans to close 800 stores.

Meanwhile, apparel retailer Chico’s will close at least 250 stores, including White House Black Market, over a three-year period. J.Crew will shutter at least five stores and J.C. Penney’s announced it will close three stores in 2019 and more will likely follow.

Destination Maternity plans to close up to 280 stores by 2022. Gap is looking to close hundreds of stores. Starbucks is closing 150 locations. Christopher & Banks will shutter 30 to 40 stores. Mattress Firm filed for bankruptcy and is closing hundreds of stores. Lowe’s announced it will shut down 20 underperforming U. S stores by Feb. 1. Meanwhile, David’s Bridal announced this month that it has emerged from bankruptcy.

Ratings firm Moody’s recently released a list of 34 distressed retailers, which includes J.C. Penney, PetCo, Rite-Aid, Hudson’s Bay Co., Lands’ End, Pier One Imports, Neiman Marcus, and J.Crew.

“As retail evolves, you’re going to see some weak retailers out there that aren’t going to make it,” says Charlie O'Shea, lead retail analyst at Moody's. “How do they stay competitive? If you’re a retailer, you’ve got to be able invest in your stores. You have to invest in your online capabilities and you have to pay your debts. When you’re in a state of distress or challenged from a financial perspective, you can’t do all three.”

Sears is the poster child for that dynamic, according to O’Shea. “There wasn’t enough money to invest in everything and the stores got really run down,” he says.

There will always be store closures

“Every retailer has closed stores,” O’Shea says. “Even before online. [For example], you built the store eight years ago and the traffic moved away from you. You’re going to thin the herd and that has been going on for years.”

At one point Kohls, for example, was building 125 to 150 stores a year, and then the retailer pulled back and probably closed some that didn’t work, O’Shea notes. “The key is to fail fast,” he says.

Walmart has had formats that didn’t work out, as have other retailers.

But closing underperforming concepts or locations is much easier for retailers in a strong credit position. When it comes to distressed and weaker retailers from a credit perspective, they can’t shift on the fly like that, O’Shea says.

“And when you start to talk about collateral damage from the Amazon/Walmart price war, it’s clearly survival of the fittest. The strong are getting stronger,” he notes. “So far this holiday, the big guys win and the little guys are losing, and it’s just a question of how bad will they lose? Because you can’t get into a price war with Amazon or Walmart or Target or Best Buy, because you can’t win.”

He adds that bricks-and-mortar retailers better know how to impress shoppers. “If I’m a shopper and I make a conscious decision to come to one of your stores, I better be impressed. If I’m not, I’m not coming back and I may avoid your website as well.”

There’s likely no magic bullet solution to any of this, but the theme for 2019 is there will be retailers having problems.

Less debt coming due is encouraging

One of the positives for the next couple of years for the retail sector is there’s not a ton of debt coming due in 2019 and 2020, O’Shea says. “There’s not a tsunami of debt like we’ve seen. A lot of these guys were able to manage through some meaningful debt maturities and that’s a positive.”

Fourth quarter 2018 was relatively tight when it came to financial matters, but strong retailers continue to have access to the capital markets. Weak retailers are likely going to have issues, O’Shea says. They’re going to have to pay up and deal with more onerous credit terms, as credit transactions are going to be done on a one-off basis.

“If you’re a company that investors perceive to be kind of on the bubble—the bubble being will they survive or won’t they you’re going to have a tough time getting things done,” he notes.

O’Shea says 2019 will likely be a continuation of 2018, with tactical store closures as well as bankruptcies.

You’re going to see this continuing,” O’Shea says. “It’s survival of the fittest.”

https://www.nreionline.com/retail/how-many-more-store-closures-are-expected-2019
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