America’s ‘Retail Apocalypse’ Is Really Just Beginning


43 bookmarks. First posted by notaddicted 11 days ago.


Until this year, struggling retailers have largely been able to avoid bankruptcy by refinancing to buy more time. But the market has shifted, with the negative view on retail pushing investors to reconsider lending to them. Toys “R” Us Inc. served as an early sign of what might lie ahead. It surprised investors in September by filing for bankruptcy—the third-largest retail bankruptcy in U.S. history—after struggling to refinance just $400 million of its $5 billion in debt. And its results were mostly stable, with profitability increasing amid a small drop in sales.
retail  fail  trends  amazon  economics 
3 days ago by dancall
The spillover from retailer debt will flow far and wide across the economy.
business 
4 days ago by jellis
The spillover from retailer debt will flow far and wide across the economy.
reference  amazon  business  economics  finance  retail 
4 days ago by mattsaler
America’s ‘Retail Apocalypse’ Is Really Just Beginning
By Matt Townsend, Jenny Surane, Emma Orr and Christopher Cannon
November 8, 2017
The so-called retail apocalypse has become so ingrained in the U.S. that it now has the distinction of its own Wikipedia entry.

The industry’s response to that kind of doomsday description has included blaming the media for hyping the troubles of a few well-known chains as proof of a systemic meltdown. There is some truth to that. In the U.S., retailers announced more than 3,000 store openings in the first three quarters of this year.

Announced store openings and closings
Excluding grocery stores and restaurants
#retail  #industry  #challenges  #stats 
5 days ago by phil_hendrix
America’s ‘Retail Apocalypse’ Is Really Just Beginning
from twitter
6 days ago by philrj
The reason isn’t as simple as Amazon.com Inc. taking market share or twenty-somethings spending more on experiences than things. The root cause is that many of these long-standing chains are overloaded with debt—often from leveraged buyouts led by private equity firms. There are billions in borrowings on the balance sheets of troubled retailers, and sustaining that load is only going to become harder—even for healthy chains.
retail  bricksandmortarretail  decline  debt  finance  review  critique  USA  Bloomberg  2017 
6 days ago by inspiral
The so-called retail apocalypse has become so ingrained in the U.S. that it now has the distinction of its own Wikipedia entry.
retail  economics 
7 days ago by ftofani
great clean graphics in this article
from twitter
7 days ago by demetriodor
By Matt Townsend Matt Townsend , Jenny Surane Jenny Surane , Emma Orr Emma Orr and Christopher Cannon Christopher Cannon The so-called retail apocalypse has…
from instapaper
8 days ago by loganrhyne
It's not just Amazon that's killing retail. And the worst is yet to come. "If today is considered a retail apocalypse, then what’s coming next could truly be scary."
8 days ago by leolaporte
The so-called retail apocalypse has become so ingrained in the U.S. that it now has the distinction of its own Wikipedia entry. via Pocket
IFTTT  Pocket 
8 days ago by archizoo
By Matt Townsend Matt Townsend , Jenny Surane Jenny Surane , Emma Orr Emma Orr and Christopher Cannon Christopher Cannon The so-called retail apocalypse has…
instapaper 
8 days ago by derekbrown
Enlightening read on the debt issues that many retailers are facing. Also a great example of telling a story with charts.
9 days ago by thingles
The so-called retail apocalypse has become so ingrained in the U.S. that it now has the distinction of its own Wikipedia entry.
this-week-403  Around-the-web  Matt  ecommerce  retail  amazong  jobs  warehouse-facility  warehousing  economic-development 
9 days ago by areadevelopment
America’s ‘Retail Apocalypse’ Is Really Just Beginning
from twitter
9 days ago by jamescampbell
Matt Townsend, Jenny Surane, Emma Orr and Christopher Cannon:
<p>Making matters more difficult is the explosive amount of risky debt owed by retail coming due over the next five years. Several companies are like teen-jewelry chain Claire’s Stores Inc., a 2007 leveraged buyout owned by private-equity firm Apollo Global Management LLC, which has $2 billion in borrowings starting to mature in 2019 and still has 1,600 stores in North America.

Just $100m of high-yield retail borrowings were set to mature this year, but that will increase to $1.9bn in 2018, according to Fitch Ratings Inc. And from 2019 to 2025, it will balloon to an annual average of almost $5bn. The amount of retail debt considered risky is also rising. Over the past year, high-yield bonds outstanding gained 20%, to $35bn, and the industry’s leveraged loans are up 15%, to $152bn, according to Bloomberg data.

<img src="https://www.bloomberg.com/graphics/2017-retail-debt/img/02-loans-MSAs-wide.png" width="100%" />
<em>(Key: colour represents percent of retail real estate loans that are delinquent by metro areas
Yellow 0-5%; orange 5-10%; red 10-25%; brown 25-53%)</em>

Even worse, this will hit as a record $1 trillion in high-yield debt for all industries comes due over the next five years, according to Moody’s. The surge in demand for refinancing is also likely to come just as credit markets tighten and become much less accommodating to distressed borrowers.

Retailers have pushed off a reckoning because interest rates have been historically low from all the money the Federal Reserve has pumped into the economy since the financial crisis. That’s made investing in riskier debt—and the higher return it brings—more attractive. But with the Fed now raising rates, that demand will soften. That may leave many chains struggling to refinance, especially with the bearishness on retail only increasing.</p>


Higher interest rates, even a little, will create big problems as this debt rolls over: stores will have to generate more money to pay the interest, at a time when the advantages for internet retailers will be growing.
amazon  retail  economics 
10 days ago by charlesarthur
The so-called retail apocalypse has become so ingrained in the U.S. that it now has the distinction of its own Wikipedia entry.
Archive 
11 days ago by plouf
This is surprisingly interesting even though I'm not directly impacted (yet?)...
from twitter_favs
11 days ago by sogrady
By Matt Townsend Matt Townsend , Jenny Surane Jenny Surane , Emma Orr Emma Orr and Christopher Cannon Christopher Cannon The so-called retail apocalypse has…
from instapaper
11 days ago by nugent
The so-called retail apocalypse has become so ingrained in the U.S. that it now has the distinction of its own Wikipedia entry. via Pocket
IFTTT  Pocket  facebook  twitter 
11 days ago by Werderbach
The spillover from retailer debt will flow far and wide across the economy.
11 days ago by thenerdscribe
The reason isn’t as simple as Amazon.com Inc. taking market share or twenty-somethings spending more on experiences than things. The root cause is that many of these long-standing chains are overloaded with debt—often from leveraged buyouts led by private equity firms. There are billions in borrowings on the balance sheets of troubled retailers, and sustaining that load is only going to become harder—even for healthy chains.

The debt coming due, along with America’s over-stored suburbs and the continued gains of online shopping, has all the makings of a disaster. The spillover will likely flow far and wide across the U.S. economy. There will be displaced low-income workers, shrinking local tax bases and investor losses on stocks, bonds and real estate. If today is considered a retail apocalypse, then what’s coming next could truly be scary.
economics  finance  amazon  trends 
11 days ago by Chirael
By Matt Townsend Matt Townsend , Jenny Surane Jenny Surane , Emma Orr Emma Orr and Christopher Cannon Christopher Cannon The so-called retail apocalypse has…
from instapaper
11 days ago by hiroprot
This can't be good.
from twitter
11 days ago by bunch