Retail Trends That May Affect Central Florida

[orlandoguy]

Get ready for a major shakeup in the US’ remaining malls. Sears and JCP aren’t the only ones on the brink.

The Death of the Department Store: ‘Very Few Are Likely to Survive’

https://www.nytimes.com/2020/04/21/business/coronavirus-department-stores-neiman-marcus.html?referringSource=articleShare

[spenser1058]

macy’s plans to open all 775 stores within the next 6-8 weeks starting with GA and SC on Monday.

Services involving touch will be curtailed like cosmetics consultation and alterations.

No specifics on Florida yet.

https://www.nytimes.com/2020/04/30/business/macys-reopening-stores-coronavirus.html?referringSource=articleShare

From The New York Times 

Just for @prahaboheme : the macy’s in the article pic is the former Burdines on Lincoln Road in Miami Beach (the onetime home of “Sunshine Fashions”.)

[smileguy]

5 hours ago, spenser1058 said:

macy’s plans to open all 775 stores within the next 6-8 weeks starting with GA and SC on Monday.

Services involving touch will be curtailed like cosmetics consultation and alterations.

No specifics on Florida yet.

https://www.nytimes.com/2020/04/30/business/macys-reopening-stores-coronavirus.html?referringSource=articleShare

From The New York Times 

Just for @prahaboheme : the macy’s in the article pic is the former Burdines on Lincoln Road in Miami Beach (the onetime home of “Sunshine Fashions”.)

I don't think the public will look very kindly on this.  The vast majority of the business owners I've spoken to are going to continue as they have been (Takeout/Delivery Only) for restaurants and bars, and to match that level of service for small retail. 

[spenser1058]

J. Crew, with locations at Millenia and Simon’s I-Drive and Vineland outlet malls, has filed for Chapter 11 Bankruptcy.

Brooks Brothers, with locations in the same areas, is said to be looking for a buyer for the first time since 2002.

No word on closings for either chain thus far.

https://www.nytimes.com/2020/05/04/business/stock-market-today-coronavirus.html?referringSource=articleShare

From The New York Times 

Edited May 4, 2020 by spenser1058

[spenser1058]

Meanwhile, look for possible Chapter 11 filings by JCPenney and Neiman-Marcus by mid-May as both have recently missed debt payments:

https://www.mytotalretail.com/article/reports-j-crew-j-c-penney-neiman-marcus-group-may-file-for-chapter-11-by-mid-may/

From Total Retail 

The Mall at Millenia May be particular hardhit if things proceed, as its anchors are Nieman, Macy’s and Nacy-owned Bloomingdales. Macy has previously announced store closings of up to 20% of the chain by 2021. Again, no word yet on locations.

 

[spenser1058]

As expected, Neiman Marcus has filed for Chapter 11 bankruptcy.

While Neiman’s is expected to emerge in some form with the brand intact, look for the possibility of some store closures.

We do not know at this point what effect this may have on the Neiman’s at Millenia or the Last Call stores at the outlet malls.

https://www.nytimes.com/2020/05/07/business/neiman-marcus-bankruptcy.html?referringSource=articleShare

From The New York Times 

Edited May 7, 2020 by spenser1058

[spenser1058]

Given that Simon now has control of Millenia, in addition to the outlet malls and Florida Mall, I wonder if we should look to see some big changes and/or consolidation moving forward.

Add to that the fact that Disney Springs has moved decidedly upscale. When upscale retail initially arrived in Orlando, things were very different. 

Also, upscale retail was initially immune to all the sturm und drang that was occurring with the mid-level stores but that’s no longer the case.

Just a guess but look for things to be very different in Orlando retail within the next five years.

[nite owℓ]

I'm always a bit skeptical when businesses file for bankruptcy... suspicious of them exploiting bankruptcy loopholes, leaving taxpayers to pay for the damage. I wonder if some of the businesses are just using the epidemic an excuse when they were already on the rocks to begin with. Are there any underlying financial motives (for some businesses or executives) to do this now? We've seen how a "very successful businessman" can turn businesses inside out like a cut mango, and exploit the bankruptcy to his financial advantage via restructuring, debt write offs, funneling money into it for personal use, tax write offs, etc.

Edited May 7, 2020 by nite owℓ

[spenser1058]

36 minutes ago, nite owℓ said:

I'm always a bit skeptical when businesses file for bankruptcy... suspicious of them exploiting bankruptcy loopholes, leaving taxpayers to pay for the damage. I wonder if some of the businesses are just using the epidemic an excuse when they were already on the rocks to begin with. Are there any underlying financial motives (for some businesses or executives) to do this now? We've seen how a "very successful businessman" can turn businesses inside out like a cut mango, and exploit the bankruptcy to his financial advantage via restructuring, debt write offs, funneling money into it for personal use, tax write offs, etc.

Warren Buffett has sagely observed that, in a recession, it’s like when the tide goes out and you see who’s been swimming naked.

Upscale retailers have been involved in a ridiculous dance with private equity funds for a while now where they load up on debt - shareholders and taxpayers end up holding the bag.

Because this has been going on in retail at least since the Campeau mess (which adds developers to the shell game) in the ‘80’s, it feels more like the norm than an aberration. (Fun local fact: Robert Campeau was the developer of the Wells Fargo building up on North Magnolia and that property - along with the proposed second building which was never built - played a bit part in that huge scandal. Another local name you’ll recognize from that era is Eddie DeBartolo who gave us Altamonte and Florida Malls - his son later would be involved with Mills Park and the OFS redo.)

Depending on the election and the regulatory climate arising from the financial situation post-pandemic, this game of musical chairs may come to an end. Rest assured, however, that Wall Street bottom feeders will look to start the music again ASAP.

One thing that is certain is there will be fewer chains to play this game with. The days of the US over-saturation with stores and malls (again caused by the same usual suspects) relative to the rest of the world is coming to an end.

Edited May 7, 2020 by spenser1058

[jack]

If they are filing now, they were in trouble prior to Covid. 

Edited May 8, 2020 by jack

[spenser1058]

Giving a good look at how retail will look shortly, Nordstrom announced it is closing 16 of its full-size department stores, about 15% of the total.

The only Florida store affected is in Naples. Orlando lost its full-service Nordstrom several years back to Jacksonville. This was as Simon made the decision for Florida Mall to abandon its top-tier ambitions to the Mall at Millenia.

Significantly, Nordstrom Rack offprice stores (including those in Orlando) and the chain’s smaller Nordstrom Local shops (with a high level of service but rely heavily on e-commerce for inventory) are unaffected.

https://www.businessinsider.com/nordstrom-will-close-16-stores-list-2020-5?amp

From Business Insider 

Edited May 8, 2020 by spenser1058

[spenser1058]

Also in the news this week, rumors are stepping up following news of the J. Crew bankruptcy that Brooks Brothers may also be in play.

The 200-year old retailer, which has been privately held since 2002 by Italy’s Del Vecchio family, announced it was considering a sale last November.

BB has a full-service store at Millenia as well as outlets in the attractions area.

I have gravitated back to what is basically the great-granddaddy of American traditional menswear (Ralph Lauren started as a tie designer at Brooks when his name was still Lifsh**z) as LLBean reduced its SKUs over the past couple of years and hope any sale doesn’t affect them (its previous owner, UK’s Marks & Spencer, nearly killed the chain in the 1990’s).

http://www.ivy-style.com/brooks-brothers-for-sale.html

From Ivy Style

Edited May 8, 2020 by spenser1058

[spenser1058]

Look soon for a potential announcement that deeply troubled upscale retailer Lord & Taylor will be going away for good. This is mostly notable to us as a memory of Florida Mall’s brief run as a luxury retail pretender. At its height, the OBT center had Saks, Lord & Taylor and Nordstrom along with midprice anchors Burdines and Dillard’s plus mass merchandisers Sears And JC Penney. Upmarket specialty stores like Brooks Brothers and Restoration Hardware also rounded out the mix.

As Lord & Taylor and Saks left most of Florida. Simon made the decision to leave the high end of the Orlando market to crosstown rival Millenia, with Nordstrom leaving Florida Mall shortly thereafter.

Speaking of JCPenney, it recently missed a debt payment and it’s an open question whether paring the chain’s size or other measures are worth.moving forward.

Millenia may not get off unscathed as the story notes Neiman-Marcus is overexposed in tourism markets (like, ahem, Orlando) and may choose to exit such markets if a rebound from COVID-19 seems delayed. Since the mall’s other anchors, Macy’s and Macy’s-owned Bloomingdales are also weak right now, Simon ( who now controls Millenia after taking control of rival Taubman) may have decisions to make.

Stay tuned...

https://www.fool.com/amp/investing/2020/05/09/department-store-closures-accelerate-coronavirus.aspx

From The Motley Fool

Edited May 10, 2020 by spenser1058

[spenser1058]

Business Insider has updated its list of full-service Nordstrom closures and added the Dadeland Mall store in Kendall (a Miami ‘burb) to the list.

Our Nordstrom Rack stores as well as the full Tampa and Jacksonville stores in this area are unaffected.

 

[spenser1058]

It’s official - JCPenney has filed for bankruptcy. Few details so far:

https://www.nytimes.com/2020/05/15/business/jc-penney-bankruptcy-coronavirus.html?referringSource=articleShare

From The New York Times 

Perhaps most interesting is that Penney might have been expected to double down on its Central Florida presence during a bankruptcy, with up to 25% of its stores closing elsewhere in the country.

With Orlando’s tourism economy being one of the most deeply affected by shutdowns during the pandemic, however, we may see more stores shuttering locally than is usual for the previously fast-growing market.

In any event, it may all be rearranging deck chairs on the Titanic. An analyst in the Times story suggests  that Penney’s problems are too systemic to be solved through a simple reorganization. 

A third-party sale is possible, although who’d want them? A private equity fund might do it, but that just delays the inevitable as a PEF merely picks the meat off the carcass (see Sears) while fleecing the taxpayers.

 

 

 

 

Edited May 15, 2020 by spenser1058

[orlandoguy]

Pier 1 bows out.

“Pier 1 Imports to close stores, have sales once locations can reopen from coronavirus”

https://www.orlandosentinel.com/business/os-cfb-coronavirus-pier-1-orlando-closes-20200519-3sfp5w2wpje2to7nysfydcoo2y-story.html

[spenser1058]

Meanwhile, JCPenney is saying it will close 242 stores or about 29% of the current fleet. Closures may take place through 2021.

From The Motley Fool

https://www.fool.com/amp/investing/2020/05/18/jc-penney-to-close-even-more-stores.aspx

Edited May 19, 2020 by spenser1058

[spenser1058]

WWD is reporting Amazon in talks to acquire all or part of JCPenney (paywall). 

More from Motley Fool:

https://www.fool.com/amp/investing/2020/05/19/sources-say-amazon-might-be-interested-in-acquirin.aspx

Fool story suggests Amazon goal may be the real estate.

Edited May 20, 2020 by spenser1058

[spenser1058]

A video on why Amazon might be interested in buying JCPenney - to expand Amazon’s clothing business:

https://youtu.be/plpEYK_gBQA

From Scott Shafer

Edited May 27, 2020 by spenser1058

[jgardnerucf]

Only FL JCP on the list are Jax Regency and Palatka. 

[spenser1058]

1 minute ago, jgardnerucf said:

Only FL JCP on the list are Jax Regency and Palatka. 

Regency Square has run into issues as Arlington has gone downhill so that’s not surprising. I didn’t even know Palatka had a Penney’s (maybe no one else did either).

[spenser1058]

The Orlando Sentinel reports that Southeastern Grocers is ditching its BI-LO and Harvey’s stores. That will leave it with Winn-Dixie (still one of the most iconic grocery names, especially in the South, despite its many failures) and apparently Fresco y Mas.

The article notes eight new Winn-Dixies will open this year.

https://twitter.com/jeffrey97195053/status/1268253466616573952?s=21

 

Edited June 3, 2020 by spenser1058

[spenser1058]

This is not promising for Brooks Brothers:

https://www.nytimes.com/2020/06/05/business/brooks-brothers-factory-closings.html
 

From the New York Times 

“Since 1818 -Generations of Style”

[spenser1058]

And so it begins - in addition to the three factories noted above, Brooks Brothers is closing 8 stores currently.

The only one in Florida closing is on Worth Ave in Palm Beach (the tony shopping district on the island).

So far, other Florida locations like Mall at Millenia and the outlet stores.

https://www.businessinsider.com/brooks-brothers-closing-stores-full-list-could-close-factories-2020-6

From Business Insider 

Edited June 9, 2020 by spenser1058

[bqknight]

On 5/29/2020 at 4:41 PM, spenser1058 said:

Regency Square has run into issues as Arlington has gone downhill so that’s not surprising. I didn’t even know Palatka had a Penney’s (maybe no one else did either).

Looks like Fashion Square is also closing. SIAP - https://bungalower.com/2020/06/08/j-c-penney-closing-at-fashion-square-mall/