The Death Spiral Archives - Page 2 of 16

See the Retail Apocalypse at JC Penney

July 2, 2019July 2, 2019 daniel How is JC Penney staying in Business?, Is JC Penney’s in the Department Store Death Spiral?, JC Penney (NYSE: JCP), Retail Extinction is Heating Up, See the Retail Apocalypse at JC Penney, The Retail Apoclaypse the Worst is Yet to Come

Moreover, JC Penney’s debt was over 10 times the size of its July 2, 2019; market capitalization of $345.33 million. Given these figures, I cannot see how JC Penney can pay off those debts.

The Death Spiral

Is Bed Bath & Beyond Dying?

June 25, 2019June 25, 2019 daniel Bed Bath & Beyond (NASDAQ: BBBY), How close is Bed Bath & Beyond to the retail death spiral?, How Online Retail is Killing Bed Bath & Beyond, Is Bed Bath & Beyond Dying?, Is Bed Bath & Beyond Making Money?, Is Brick and Mortar Shopping Dying Out?, Wayfair (NYSE: W), What is Going Wrong at Bed Bath & Beyond?, Why Bed Bath & Beyond Management will Sell Out

We can sum Bed Bath & Beyond’s woes up in three words; Amazon (NASDAQ: AMZN), Wayfair (NYSEL W), and Walmart (NYSE: WMT).

The Death Spiral

Federal Reserve Average Americans are Broke

June 22, 2019 daniel Americans are on Shaky Ground Financially, Average Americans are Broke, Federal Reserve Average Americans are Broke, Illusory superiority, Report on the Economic Well-Being of U.S. Households in 2018

25% of US adults live in households with a family income of less than $25,000 a year.

The Death Spiral

Can AutoNation Survive Falling Car Sales?

June 21, 2019June 21, 2019 daniel AutoNation (NYSE: AN), Can AutoNation Survive Falling Car Sales?, Can AutoNation Survive the Car Sales Collapse?, Is AutoNation a Cash-Rich Company?, Is AutoNation Making Money?, US Car Sales Collapse, Will AutoNation Survive?

Sales figures show that US car sales are collapsing. In fact, CleanTechnica estimates American car sales for every non-US automaker fell between May 2018 and May 2019.

The Death Spiral

Sears is suing Lampert and the US Treasury Secretary

April 22, 2019April 22, 2019 daniel Does Sears have a future, Eddie Lampert, Lampert Lawsuit could create Problems for President Trump, Management accuses Lampert and Seritage of looting Sears, Sears is suing Lampert and the US Treasury Secretary, Sears Opens New Stores

Thus, circumstances support the lawsuits allegations that Lampert and other insiders were conspiring to strip Sears of assets. The stripping allegedly includes hundreds of millions of dollars in rent and leases Seritage charges Sears.

The Death Spiral

Will Abercrombie & Fitch (ANF) Die this Holiday Season?

December 29, 2018December 29, 2018 daniel Abercrombie, Abercrombie & Fitch, Abercrombie and Amazon, Fitch Abercrombie, Walmart (NYSE: WMT)

The situation is not that bleak for Abercrombie & Fitch because of the clothing market’s decentralized nature. To clarify, there is more than enough market share for Abercrombie & Fitch (ANF) to survive.

Notably, Amazon Prime had 95 million subscribers in June 2018 up from 85 million in June 2017, Statista calculates. Thus, Amazon Prime is the fastest growing and most important retail outlet in America.

The Death Spiral

Desperate Sears Holdings is auctioning debt in the Hallway

November 30, 2018 daniel Desperate Sears, Desperate Sears Holdings is auctioning debt in the Hallway, Sears Holdings, Sears Holdings is trying to Sell 505 Stores, Will Kmart Disappear?

Debt is not the only thing, Sears Holdings is trying to unload. The Chicago Tribune reports Sears is seeking buyers for 505 stores.

If a buyer cannot be found for the stores by December 5, 2018, (next Wednesday) Sears could liquidate the locations. Notably, Sears Holdings is seeking bids on the liquidation of the stores as well.

Sears is planning to sell or liquidate most of its locations if The Tribune is correct. Sears operated 866 stores in August 2018, USA Today estimates. In detail there were 506 Sears’ stores and 360 Kmart outlets in operation over the summer.

However, that number has probably shrunk because of recent closings. Notably, Sears planned to close 13 Kmarts and 33 Sears stores in November. Hence Sears is probably operating around 820 stores.

Thus Sears is planning to shrink its footprint to 315 stores if The Tribune and USA Today are correct. Under those circumstances, most of the company’s stores will close.

The Death Spiral

Will JC Penney (JCP) Die this Holiday Season?

November 13, 2018November 14, 2018 daniel Dollar General’s Revenues are double those of JC Penney (JCP), Here’s Why JC Penney (JCP) will Declare Bankruptcy Next Year, How JCP Penney (JCP) will die, How the Ghost of JC Penney will haunt the Internet, Is JC Penney (JCP) in the Death Spiral?, JC Penney (JCP), JC Penney’s (NYSE: JCP), JC Penney’s death, Penney’s, Why Penney’s will close Large Numbers of Stores in 2019, Will JC Penney (JCP) Die this Holiday Season?, Will TJX Buy JC Penney’s?

The 2018-2019 Holiday Season could kill two of the most historic names in American retail, Sears (OTMKT: SHLDQ) and JC

The Death Spiral

Why Macy’s (M) could die

November 10, 2018November 10, 2018 daniel Amazon is winning the Apparel Wars, Bluemercury, Can Macy’s (M) Compete with Amazon?, How many stores will Macy’s Close?, How safe is Macy’s (M) Dividend?, Is Bluemercury the future of Macy’s (M)?, Is Macy’s (M) Making Money, the Macy’s dividend, Why Macy’s (M) could die

The Macy’s brand may not die, but Macy’s as we know it is dying. Macy’s will have to completely transform its business model just to survive.

Macy’s investors enjoyed a dividend yield of 4.13%, an annualized payout of $1.51, and a payout ratio of 38.4% on 8 November 2018. That’s superb for a $37.78 a share stock.
Macy’s is planning a 37.7¢ dividend for January 2, 2019. However, that dividend has not increased since June 2017.

Under these circumstances, Macy’s is a respectable dividend stock, but it is too risky for long-term investment. For instance, I think the Macy’s dividend will soon decrease or disappear.

The Death Spiral

Sears Bankruptcy caused by Lack of Cash

October 28, 2018 daniel Eddie Lampert’s Sick Scheme to save Sears with Bankruptcy, Lampert’s financial engineering, Nordstrom (NYSE: JWN), Sears (OTC: SHLD), Sears Bankruptcy, Sears Bankruptcy a Symptom of a Dysfunctional Retail Economy, Sears Bankruptcy and the Retail Death Spiral, Sears Bankruptcy caused by Lack of Cash, Sears Bankruptcy Lots of Stores No Cash, The Cruelty of Eddie Lampert caused the Sears Bankruptcy, Why the Sears Bankruptcy is happening, Will Other Retailers Join Sears in Bankruptcy

The obvious conclusion is that these retailers, like Sears, become overextended and one quarter away from the Death Spiral. To clarify, the retail Death Spiral occurs when a company cannot generate enough cash to pay its debts.
In today’s environment, however, credit is so cheap retailers can avoid the death spiral by borrowing. When the loans come due, the retailers borrow more.
Under those circumstances, there is no incentive for retailers to modernize, close money-losing locations, or change their inventories. Instead, they keep operating like it is still 1988 until they can longer pay their debts.
A classic example of that was The Bon-Ton Stores (OTC: BONTQ) a department store operator that died earlier in 2018. Markedly, Bon-Ton was hiring extra staff for Christmas season 2017, a few months before they liquidated it. Astoundingly, Bon-Ton is “poised for a comeback” under the direction of delusional management, USA Today claims.