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Retail Industry

America’s Retail Apocalypse Is Greatly Accelerating: Retail Sales Suffer “Biggest Drop” Since September 2009

February 18, 2019 By Sheep Media

following article was written by Michael Snyder and originally published at The Economic Collapse. 

All over America retailers are going bankrupt and closing stores.  Of course this has been happening for years, but as you will see below the numbers have dramatically escalated during the early portion of 2019.  Our landscape is already littered with countless numbers of hollowed out stores and abandoned malls, and it is about to get a whole lot worse.

Retailers were hoping that a strong holiday season would turn things around, but that didn’t happen.  In fact, we just learned that retail sales in the United States suffered “their biggest drop in more than nine years” during the month of December…

U.S. retail sales recorded their biggest drop in more than nine years in December as receipts fell across the board, suggesting a sharp slowdown in economic activity at the end of 2018.

The Commerce Department said on Thursday retail sales tumbled 1.2 percent, the largest decline since September 2009 when the economy was emerging from recession.

Every time I write an article like this, a few commenters chime in and blame this entire trend on the rise of online retailing.  And without a doubt online retailing has been growing in recent years, but it still accounts for less than 10 percent of the entire industry.

If online retail sales were to blame for this latest drop, you would expect to see that reflected in the numbers.  But instead, when we look at the numbers what we find is that online retailers experienced “the biggest drop ever” during the month of December…

December online internet sales (non-store retailers) tumbled 3.9% MoM – the biggest drop ever

So brick and mortar retail sales are going down and online retail sales are going down.

It is starting to smell a lot like a recession, and many in the industry are starting to panic.

And when I say panic, I mean that they are closing stores at a pace that is far faster than last year.  In fact, so far retail store closings are 23 percent ahead of the pace set last year…

Coresight Research released an outlook of 2019 store closures Wednesday, saying there’s “no light at the end of the tunnel.”

According to the global market research firm’s report, six weeks into 2019, U.S. retailers have announced 2,187 closings, up 23 percent compared to last year. Those closings include 749 Gymboree stores, 251 Shopko stores and 94 Charlotte Russe locations.

Unfortunately, the number of store closings is about to double because Payless ShoeSource plans to declare bankruptcy and shut down 2,300 stores…

U.S. discount retailer Payless ShoeSource Inc plans to close all of its approximately 2,300 stores when it files for bankruptcy later this month for the second time in as many years, people familiar with the matter said on Thursday.

And Payless is far from alone.  If you can believe it, the number of retail bankruptcies in 2019 is “already at one-third of last year’s total”…

Bankruptcies also are continuing at a rapid pace “with the number of filings in the first six weeks of 2019 already at one-third of last year’s total,” the report states.

Ladies and gentlemen, this is what a retail apocalypse looks like, and we are still in the early chapters.

It is going to take some time for this drama to fully play out.  Just look at Sears – it is a money bleeding zombie of a company, but Eddie Lampert has convinced investors to give things one more try.  But they are going to zero, and so is JC Penney, and so are a whole host of other major retailers.

In the end, millions upon millions of square feet of retail space is going to be sitting vacant.  Some of the more economically depressed areas of the country are going to closely resemble ghost towns, and we are going to see a commercial real estate crisis that is off the charts.

Switching gears, we also just learned that the number of Americans that are at least 90 days behind on their auto loans is already “more than 1 million higher” than it was during the peak of the last recession…

More than 7 million Americans are 90 days or more behind on their vehicle loans as of the end of 2018, according to data released Tuesday by the New York Federal Reserve. That’s more than 1 million higher than the peak in 2010 as the country was recovering from its worst downturn since the Great Depression.

How is that possible?

I thought that the U.S. economy was supposed to be “booming”.

Isn’t that what they have been telling us?

In recent weeks I have repeatedly brought up current economic numbers that are even worse than the last recession, and yet so many people out there continue to insist that everything is just fine.

No, everything is definitely not “just fine”.

Economic activity is slowing down dramatically, and many believe that things are about to get a whole lot worse.  In fact, Peter Schiff is warning that what is ahead “is going to be worse than what we now call the Great Recession”…

People are going to realize that we checked into the monetary roach motel that I talked about from the beginning and that there’s no way out, and then the dollar is going to fall like a stone.

When they find out that it’s never over and it didn’t work, then there’s going to be nothing propping up the dollar and it’s going to drop like a stone, the price of gold is going to take off, and the recession that we’re entering into, which is going to be an inflationary recession, is going to be worse than what we now call the Great Recession.

Maybe it’s taken longer than we might have thought to play out, but this is the beginning of the end.”

I wish that I had better news for you today, but I don’t.

The retail apocalypse is accelerating, America’s debt crisis is starting to reach a critical level, and very challenging days are approaching for all of us.

Filed Under: Economy Tagged With: Retail Apocalypse, Retail Industry

This Abandoned Macy’s Is Now A Homeless Shelter Housing Its Former Employees

June 16, 2018 By Sheep Media

The Landmark Mall in Alexandria, VA, used to be the talk of the town – in the 1960’s. Times have changed; Photo sources: NY Times

ZeroHedge| The Macy’s at the Landmark Mall in Alexandria, Virginia used to be an iconic and historic building. In what is now undoubtedly a sign of the times, it has been converted into a homeless shelter until the property can be razed and its owner, the Howard Hughes Corporation, can repurpose the property and build something new at its location.

Even more telling, this homeless shelter houses many of those who used to work at the very same Macy’s.

In the realm of brick-and-mortar retail, the times are definitely a changin’. We have often, on this site, detailed not only the slow and painful death of brick-and-mortar retail as it has been occurring, but also how the value of once coveted mall property has disintegrated and similarly, how landlords of these properties now find themselves stuck between a rock and a hard place – tenants are dropping like flies, sales numbers used to help calculate rent are on the decline and property appraisals have been underwhelming. This has led to a influx of abandoned property, not unlike the Macy’s in Alexandria, just sitting and waiting to be repurposed

(Photo sources: NY Times)

The Macy’s in the Landmark Mall was the topic of a recent New York Times article, detailing how a once historic landmark that it is now abandoned and has become a homeless shelter, 15 months after it had its last customers. The Macy’s “now provides 60 beds, hot meals and showers for families and for single men and women who are having trouble finding a place to live in a city with a scarcity of affordable housing.”

Here is The New York Times on the property’s once iconic status as a historic landmark:

The Landmark Mall was once at the vanguard of shopping. Opened in 1965, the mall housed the region’s most fashionable department stores, Hecht’s, Woodward & Lothrop and Sears & Roebuck. Boys came to buy their first suit at the haberdasher, and teenage girls could get their shoes dyed to match the color of their prom dress.

Alexandria’s former mayor William D. Euille remembered playing the clarinet in the high school band at the mall’s opening ceremony. “It was the economic engine of the city,” he said.

Landmark tried to adapt over the years. It began as an open-air shopping center and went through an overhaul in the 1980s to enclose the property.

Like many other malls, however, it has gone the way of the buffalo:

Eventually, the mall succumbed to retail’s propensity to chase after newer, flashier spaces. Developers built larger malls with more upscale brands nearby in Pentagon City and Tysons Corner, siphoning customers away from Landmark.

Landmark’s original anchor stores either have been bought out, went bankrupt or are clinging to life — like many in the retail business. Last year, 6,985 stores closed in the United States, a record number, according to Coresight Research, a retail analysis and advisory firm. This year, retailers are on a pace to close roughly 10,000 stores.

In its final years of operation, the Landmark’s tenants included two dollar stores and a tax preparer. Only the Sears is still operating. A lone, blue inflatable figure dances on the store’s roof, beckoning shoppers.

READ MORE: Thousands More Stores Are on the 2018 Retail Apocalypse DEATH LIST: Are your local stores on the list? 

Plans to revamp the property, including a 2009 effort to help it once again become an open-air shopping destination, have failed – namely due to the property’s former owner, General Growth Properties, went bankrupt after the 2008 financial crisis. Subsequent to that, the mall was sold and those plans were scrapped.

Landmark’s current owner, the Howard Hughes Corporation, plans to tear down the mall and build a mixed-used space that could include offices, retail and other attractions that are still being finalized. It could take many more years to complete the planning, permitting and construction process for such a huge project.

“It’s a great piece of real estate,” said Mark Bulmash, a senior vice president of development at Howard Hughes.

The article then tells several stories of individuals who are moving into this property as it has now become a temporary homeless shelter for a builder who is seeking shelter while it constructs a permanent location on the other side of Alexandria:

Karleen Smith used to work at the Macy’s in Landmark Mall, putting price tags on summer dresses, housewares and the latest styles of shoes.

On Saturday, Ms. Smith, 57, returned to her former store, not as an employer or a customer, but as a resident.

The former Macy’s in this vacant shopping mall outside Washington has been transformed into a homeless shelter.

“It’s weird to be moving into this building. I used to work here,” she said inside the shelter’s common room, which was once the men’s department. “It’s called survival.”

Smith’s memories of the building, prior to its current state, were fondly noted in the NY Times article – again just making even clearer how the property is long past its heydey and has made a full 180 degree turn for the worse:

Ms. Smith, the former Macy’s worker, rested on the floor of the common room under a frayed green blanket. Before coming to the shelter, Ms. Smith had been living in a car and showering in a recreation center. “I was tired,” she said.

Ms. Smith, who worked at Macy’s as a seasonal hire during the holidays 10 years ago, remembers the store fondly.

On a slow day, she would try on makeup at the cosmetics counter and spray herself with samples of perfume. She said she could never afford to buy anything of her own. “All I could do was admire it.”

As Ms. Smith waited to move into her new room, the electricity cut out to a portion of the shelter and the staff set up battery powered camping lanterns to light the way for movers. Volunteers brought crockpots with taco makings for dinner and put together goody bags for the children staying there.

For many of the current residents of the shelter, what has happened is nothing short of shocking.

Keith Ham, 43, who has been living the shelter for about three months, said his family did not believe where he was moving.

“They say, ‘Macy’s at the mall?’ And I say, ‘For real, Macy’s at the mall.’”

We detailed the glut in retail space in an early May article that we published, noting that the American shopping mall – that centerpiece of the 1980’s big-box retail model – has fallen on hard times in recent years as the growing dominance of e-commerce has finally started to take a toll on brick-and-mortar retailers – a subject that we’ve frequently discussed.

Shifting consumption patterns (i.e. the dawn of e-commerce), years of underinvestment by mall owners, and a seemingly unceasing stream of retailer bankruptcies are the factors that have been responsible for most of the damage to Mall REITS, particularly products tied to lower quality malls.

Emptying storefronts and malls have only exacerbated a glut of American retail space. The country now has roughly 24 square feet of retail space per capita, more than twice that of Australia and 5 times that of the UK.

In April, we talked about the breakneck speed with which retail shopping space was closing. Retail real estate carnage is continuing this year with no signs of slowing up, as Bloomberg reported back in April that over 77 million square feet of retail real estate has closed this year and that 2018 will easily pass 2017’s record of 105 million square feet closed. The latest example was the fall of the once massive Toys ‘R’ Us name:

The fall of the Toys “R” Us chain, with more than 700 U.S. stores, shows how much retail real estate has changed in just the last decade. When KKR & Co., Bain Capital, and Vornado Realty Trust took over the company in 2005, the buyers justified the $7.5 billion price, in part, because of the supposedly valuable properties that came with the deal.

We also noted that the price of such properties was tanking. If there was ever to be any silver lining to the complete carnage in the retail real estate space, it was the argument that has been perpetuated over the last decade or so: despite retail stores closing, the real estate would eventually be worth something.

This argument was made by real estate investment trusts as well as activist investors and analysts who tried to put a positive spin on the death of brick and mortar retail. Now, with more space freeing up, the bid under former retail property is at ask of falling off as supply is starting to get far ahead of demand:

Real estate can put a floor under the value of a retailer and make it easier for the company to borrow. Maybe a particular store concept doesn’t work out as consumers’ tastes change, but in that case, investors can always sell the land and buildings to someone with a better plan. Long-term leases can be similarly valuable. But what if the problem isn’t that a particular store is out of fashion, but that consumers are just shopping less at brick-and-mortar retailers in general? As more storefronts empty, the valuation floor will look wobblier.

 

The story of Alexandria should come as no surprise to anybody who has been following brick-and-mortar retail, watching it get torched by online competitors, mostly Amazon.com.

Unfortunately as times goes on, the reality only gets more desperate for brick-and-mortar retail, and its (former) employees, at a time when many considered that the decimation of brick and mortar may finally be ending.

It appears that it’s only just beginning.

Filed Under: Economy Tagged With: Homeless Shelter, Landmark Mall, Macy’s, Retail Industry, Virginia

As Goes Walmart, So Goes America: “Major Holes Are Starting to Form In Its Business”

May 27, 2014 By Sheep Media

This article was written by Mac Slavo and originally published at SHTFplan.com

If there’s one indicator of the state of the global economy it’s consumer purchasing on the retail level. And if there’s one retail company to watch as a prelude to what comes next it’s always been Walmart. Known for low prices, low wages, and multi-billion dollar profits, the world’s largest retailer is struggling.

According to a recent report from Motley Fool, the behemoth’s same stores sales in the U.S. have dropped precipitously and internationally they have outright collapsed, signalling serious trouble ahead.

Wal-Mart has begun to lose its cache with consumers and major holes are starting to form in its business.

wal mart truck

Interestingly, Wal-Mart has hidden its financial problems from the headlines because challenges are different around the world, masking themselves in the overall picture.

But when you dig between the headlines you can see a company in serious trouble and could be the latest in a long line of leading retailers to go from boom to bust in the blink of an eye.

…

The problem for Wal-Mart goes far further than just cyclical swings in retail or a weak economy. Wal-Mart has long been able to lure customers with one-stop shopping and low prices, but consumer trends are now working against that core strategy. For cost conscious shoppers, lower prices can often be found online and more affluent consumers are choosing style and quality products over one-stop shopping.

…

Here’s where Wal-Mart’s story gets really interesting. Sales in the U.S. are beginning to struggle, but overseas the company’s profitability is in downright freefall.

In an earlier report we noted that economist John Williams says a deep recession will likely become official by Summer of this year, when the government releases it latest economic growth numbers.

According to Williams, consumers in America are strapped because of stagnant incomes and rising costs for food, energy and health care, leaving little money in consumers’ pockets for other purchases. “The consumer doesn’t have the liquidity to fuel the growth in consumption,” Williams says, a serious implication that is a key reason for why Walmart is seeing same store sales collapse and return on investment shrink across the board.

In June of 2009 trend forecaster Gerald Celente, in an interview on Infowars with Alex Jones, discussed the parallels between Walmart and the United States of America, suggesting that as goes Walmart, so goes America.

When you hear these advertisements where Walmart brags about everyday low prices, well sure, we’re turning into a Walmart economy.

With everyday low prices comes everyday low paying jobs. With everyday low paying jobs, comes everyday low quality. So every day America is sinking lower and lower.

Since then we’ve learned that a large percentage of Walmart employees make so little money that they have to depend on the government for nutritional assistance, joining nearly 48 million other Americans in the process. Morale at the company has always been low, as evidenced by the often sullen faces seen when being “greeted” upon entering a local store. This mirrors the general sentiment in many parts of America as the financial and economic destruction of the last five years takes it toll.

For many, Walmart has become the soup kitchen of the modern day bread line. One could even argue that the only reason Walmart hasn’t yet gone bankrupt is because of the surge of monthly customers who receive Electronic Benefits Transfers from the government and head straight to the low-cost retailer to spend their taxpayer subsidized income on food, clothing and other knick-knacks they offer.

Just as Walmart has been sinking over the last several years, so too has America.

Our national debt has skyrocketed, Americans dependent on monthly disbursements just to survive have hit historic highs, and there are more people out of the labor force today than there are working.

Taken in this context Walmart’s success or failure certainly seems to mirror that of the United States as a whole.

Like Walmert, iconic retailers Montgomery Ward, Sears, and K-Mart were once believed to be immune from the busts normally associated with economic downturns and new competition. The United States, another super power in its sphere of influence, also seems indestructible for these reasons.

Reality is catching up with both of them.

Filed Under: Banks, Communism, Corruption, Economy, Government Tagged With: A Sheep No More, America, Bubbles, Economy, Retail Industry, Wall Mart

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About A Sheep No More

A Sheep No More is no longer plugged into the Matrix like the many sheep who are still programmed to believe that they have correct information provided by a varied and “independent media.” In fact the media is owned by 5 or 6 mega-media companies run by corporate advertising executives and Washington.

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