The coronavirus pandemic will cause the retail apocalypse to escalate, creating tough times for retail REITs like Choice Properties REIT (TSX:CHP.UN).The post Coronavirus Will Accelerate the Retail Apocalypse appeared first on The Motley Fool Canada. The only way to escape the fate is to tackle head on the underlying causes of the ‘Zombie Mall’ situation. They invested profits locally and provided jobs for rural households. More important, Lampert personally lent billions to Sears Kmart, increasing corporate debt. This story is … The mismanagement of Sears reflects an ongoing pattern: private equity takeover artists that benefit from hobbling the companies they purchase. Sears, once a giant of America’s consumer-led economy, was run into the ground by hedge-fund king Eddie Lampert. Instead they've focused on balanced budgets and low inflation, creating a perpetual situation in which the supply of workers outpaces the supply of jobs. 1. Family-owned stores and diners on small-town Main Streets were sites of human contact. Coined as “The Retail Apocalypse” the prophetic demise of retail has accelerated in the past decade with the advent of the Great Recession, e-commerce, changing consumer behaviours, and the final nail in the coffin COVID-19. This story is at odds with the broader narrative about business in America: The economy is growing, unemployment is low, and consumer confidence is at a decade-long high. Many U.S. retail REITs were caught off guard by the retail apocalypse and even tried to downplay the consequences; they suffered disastrously as a result. Jennifer A. Kingson. Hence the decline of good-paying middle-class jobs, and the rise of poorly compensated service work. What causes the retail apocalypse e-commerce Rapid growth. Specifically, "[p]rivate equity firms purchased numerous chain retailers over the past decade, loading them up with unsustainable debt payments as part of a disastrous … Duyen does not accept Amazon and other online realtors as the cause of the "retail apocalypse," however. A hundred thousand retail jobs were lost from October 2016 to April 2017; in June, 1,000 stores closed in a week. RadioShack, The Limited, Payless, and Toys“R”Us are among 19 retail bankruptcies this year. ‘Retail apocalypse’ now: Analysts say 75,000 more U.S. stores could be doomed. An empowered workforce would be able to demand a cut of that revenue. Senate votes down $15 minimum wage during vote-a-rama. The mainstream media blames e-commerce or experience oriented millenials as the main causes of the apocalypse . Trump’s Trade Policy Will Cause the Retail Apocalypse to Accelerate The experts I spoke to all agree that the retail apocalypse alone won’t do it, as Rick Helfenbein, President and CEO of the American Apparel and Footwear Association says, “A retail slowdown has never been the predictor of a pending recession.” Rather reduced retail spending is a lagging indicator caused by recession. But we just don't know yet. The company reported weak earnings for its third quarter and lowered it's outlook for the remainder of 2019. Jeremy Reitman, a stalwart of the Canadian womenswear scene who guided Montreal-based Reitmans Ltd. through the so-called retail apocalypse, has died. Dead Malls. Republicans literally want to work Americans to death, The Payroll Protection Program's problems were extremely avoidable, 5 scathing cartoons about the GOP's Marjorie Taylor Greene problem, Senate passes budget bill paving the way for majority approval of Biden's $1.9 trillion aid package. Family-owned stores and diners on small-town Main Streets were sites of human contact. “Overall, over 4,000 physical stores are … But since the 1980s, American fiscal and monetary policymaking has largely abandoned the Keynesian approaches that maintained tight labor markets. The term “retail apocalypse” refers to the perceived decline of brick and mortar retail in the United States due to the meteoric rise of eCommerce. The banks that underwrite the deals should also be slapped for earning fees off the misery of an entire industry. So the private equity kingpins who pillage companies and walk away get tax subsidies to pull it off, and this incentivizes them to borrow even more to run the game again. If you're going to have a mall with department stores in every decent-sized town, you need middle-class consumers in every decent-sized town, too. Recognizable brands like Macy's and Sears are looking shaky: the former plans to close 68 stores and lay off 10,000 workers, while the latter's business model has been rotting for years and may collapse altogether. Ecological collapse In this scenario, the ecosystem would suffer a drastic change that would lead to mass extinction. Instead, the Trump administration is likely to continue aiding wealthy financiers through regulatory neglect. Many U.S. retail REITs were caught off guard by the retail apocalypse and even tried to downplay the consequences; they suffered disastrously as a result. Stores are closing at record levels. The term ‘Retail Apocalypse’ comes from the United Stated, where it began gaining widespread usage in 2016, following the closing of a vast number of American retail stores. The impending retail apocalypse. He spent $6 billion on stock buybacks to reward investors and prop up the share price. It all started with the … News Deserts and the Retail Apocalypse. The article Foot Traffic Data Shows Signs of Retail Apocalypse Can Speak to Smart Retail Strategy by … The mall where it’s located has seen less and less foot traffic over the years, and losing its anchor store could set off a chain reaction. Private equity firms purchased numerous chain retailers over the past decade, loading them up with unsustainable debt payments as part of a disastrous business strategy. Instead, Duyen points to debt as the reason for the struggles of traditional retail businesses. Just last week, Comptroller of the Currency Keith Noreika broke with a years-long crackdown on high-risk corporate lending, signaling that more debt should be issued. Chain of Title: How Three Ordinary Americans Uncovered Wall Street’s Great Foreclosure Fraud. Amazon's expansion is often cited as a root cause of the retail apocalypse, and it continues to benefit from closures of brick-and-mortar … The Macy’s near my house is closing early next year. But, Much is written about the retail apocalypse and why it is occurring. “Retail apocalypse” it is the denomination that popularly receives the tendency of the last years in the United States of closing retail stores , just the opposite of what is expected in an era of economic prosperity and consumer confidence: the moment of great openings. News Deserts and the Retail Apocalypse. Spending continues to grow steadily. in marketing communication, retail… Last year, Sears and Kmart stores paid $200 million in rent on these properties they once owned, eating up operating revenue. There’s still plenty of opportunity for retail outlets with physical space. But this isn't the first time that the sector has seen a sudden job loss on that scale. Retail apocalypse. He spent $6 billion on stock buybacks to reward investors and prop up the share price. Our tax code. They invested profits locally and provided jobs for rural households. To lose so many jobs is indeed eye-popping — especially since the underlying fundamentals in the economy suggest it's slowly-but-steadily improving. Roughly 600,000 disappeared between 2007 and 2012. This story is at odds with the broader narrative about business in America: The economy is growing, unemployment is low, and consumer confidence is at a decade-long high. That is basically a... 3. Labor Management. Employment in general merchandise stores has fallen by almost 90,000 jobs since October. The point here is not to completely discount the importance of the internet and technology in the decline of department stores. But if it's already sick and exhausted, that same shock might just kill it. The retail apocalypse over the past several years has devastated America’s department stores, chains and mom-and-pops. We don’t have regulators willing to take action to protect workers, investors, and the economy. But they also ensure that whenever technology or economic shifts destroy old industries (as inevitably happens), new good-paying jobs are readily available to pick up the displaced workers, and employers in new sectors have no choice but to provide on-the-job-training on their own dime. Illustration: Eniola Odetunde/Axios. Increasingly, Americans' … The impending retail apocalypse. In 2005, Lampert, a former Yale roommate of Treasury Secretary Steven Mnuchin, arranged the merger of Sears with discount retailer Kmart, and immediately started shifting revenue to shareholders. This would benefit President Donald Trump’s family business, but it could also help private equity firms that split the operating side of the businesses they buy from the property side, as Sears did. Coronavirus might accelerate the retail apocalypse, but DTC brands like Warby Parker are in the clear Direct-to-consumer brands now pose an even bigger threat to traditional retail companies, designed without reliance on physical storefronts. 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 Cause and Consequences of the Retail Apocalypse. Another example: As the Times reported, many retail stores still pay salespeople based on commission, even though more and more shoppers go to the brick-and-mortar establishments just to look, and then buy online. Familiar names like J.C. Penney, Neiman Marcus and J. Enormous e-commerce players like Amazon (NASDAQ:AMZN) have essentially made … Some of the United States’ most prominent retailers are shuttering stores in recent months amid sagging sales in the troubled sector. The mall where it’s located has seen less and less foot traffic over the years, and losing its anchor store could set off a chain reaction. Many retail businesses start off well and soon plan to expand in order for the business to flourish. Ascena is just the latest victim of the so-called “retail apocalypse” — the widespread erasure of brick-and-mortar stores. Let’s take a look at why the retail apocalypse is speeding up and assess whether or not there is still value to be had investing in retail stocks. It had everything to do with regular day-to-day events that cause stores to close. British shops are being battered as the shift to e-commerce, intense competition and the fallout from Brexit cause catastrophic levels of store closures and job cuts. by hedge-fund king Eddie Lampert. Large retail … Dr. Martens survived the decline in manufacturing in the previous century for some of the same reasons it has thrived during the retail apocalypse, spurred by … Cities across the country are facing this uncertainty, with over 6,700 scheduled store closings; it’s become known as the retail apocalypse. They could put all the borrowing onto the property side and continue to deduct the interest. Australia's retail apocalypse has worsened with department store trade plunging as coronavirus threatens to cause the first recession in three … So it shouldn't surprise us that business models that rely on the idea of broadly shared middle-class prosperity are dying. While several iconic American retailers such as Sears and J.C. Penny have struggled mightily since the global financial crisis, overall evidence for the retail doomsday is mixed. The company’s profitability was increasing when it filed for bankruptcy. But while not entirely wrong, this story vastly oversimplifies what's going on with retail. Yes, some of them were outright replaced by Amazon. These workers are not confined to any one region; the entire country will share in the pain. If such a virus took hold of the world’s population, the outlook for humanity would be dire. Policymakers must also be held responsible for this looming nightmare. According to Business Insider (via Fortune), “In 2015, while the whole of retail sales were flat for the year, sales of athletic wear were up 12%.” But is there a correlation? If it's already healthy and robust, any unexpected shock to the system (like Amazon, for instance) can be weathered easily. As a shareholder of Seritage, Lampert’s hedge funds can profit from higher rents charged to new retail outlets that move into the shuttered Sears locations. Before then, unions remained strong, jobs in new industries paid well and accommodated workers transitioning from other sectors, and new job openings were readily available to people leaving shrinking industries. [3] Perhaps we should take such a scenario … Will policymakers do … Will policymakers do anything about it? However, major potential exists for such an outbreak—particularly if a virus suddenly mutates and causes what we can only term a “zombie infection.” In fact, an outbreak of this kind could lead to a desperate situation. This type of virus could spread quickly, and it would probably wipe out the human race. Coined as “The Retail Apocalypse” the prophetic demise of retail has accelerated in the past decade with the advent of the Great Recession, e-commerce, changing consumer behaviours, and the final nail in the coffin COVID-19. 11 May, 2019 . Over 12,000 physical stores have been closed, due to factors such as over-expansion of malls, rising rents, bankruptcies of leveraged buyouts, low quarterly profits outside holiday binge spending, … Coronavirus might accelerate the retail apocalypse, but DTC brands like Warby Parker are in the clear Direct-to-consumer brands now pose an even bigger threat to traditional retail companies, designed without reliance on physical storefronts. Buyout managers, including Bain Capital and longtime firm Kohlberg Kravis Roberts, stripped out nearly $2 billion in cash while debt levels rose. Because of the coronavirus and people's buying habits moving online, retail stores are closing everywhere — often for good. Why it matters: Malls are going belly up. By far the best kind of equitable income distribution program is a tight labor market, where there are perpetually more job openings than workers. The national economy has also gone through a remarkable geographic shift, in which pretty much all new job and business creation occurs in major cities. E-commerce Boom. That's precisely the sort of consumer we've lost. The Securities and Exchange Commission can and should police the designed-to-fail corporate bonds that proceed from these leveraged buyouts. It looks like Kohl's isn't defying the retail apocalypse after all. In 2019, retailers in the United States announced 9,302 store closings, a 59% jump from 2018, and the highest number since tracking the data began in 2012. Economists largely agree, for instance, that opening up trade with China eliminated about one million U.S. jobs — but the really important point is that they weren't replaced with anything. Then launch a retail event for it … News Deserts and the retail sector are a. Since October could spread quickly, and the number of people employed in general merchandise has! 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