Monday, 09 January 2017 11:56

Ten Years Since BoomBustBlog Was 1st Published & That Initial Research Still Relevant Today Featured

Trends in US Retail

We have looked into insurance companies' performance last month in regards to our bearish real estate thesis. A small comederie of companies are suffering losses and/or declining profits as we've exected. This is due primarily to increases in their expense and reduction in revenue.

Paid subscribers can access pdf this report here (724 KB) . Five other legacy research reports on the topic are available in the "Insurers, Insurance & Risk Management" category. In addition, there are ample insurance articles available throuthout the public section of BoomBustBlog by querying the "Insurers and Insurance" topic as well.

Going through those old articles is interersting, because for the most part we are in the exact same situation we were in ten years ago, ie. Greece needing yet another bailout, ie. Dead Bank Deja Vu? How The Sovereigns Killed Their Banks & Why Nobody Realizes They're Dead

The cause of much of this is the same cause that started the malaise back when BoomBustBlog was launched in 2007. Here's my very first article - The Real Trend in US Housing Prices.... Yeahh, that's right. It's real estate. I posted very briefly on that topic last week, before we officially restarted the blog - What Happens To Real Asset Lending Banks When... and To Bust or Not To Bust: Are We In A Real Estate... With ten years of full strength research under our belt, BoomBustBlog is a wealth of knoweldge - supercharged financial internet, so to say. Querying our "Commercial Real Estate" topic, you will find all of the background you need to ease into the paid report linked above. 

Six years ago, I proclaimed "The Greatest Risk To Retail Commercial Real Estate Is? Sovereign Debt! Macro Headwinds! Popping Bubbles! Busted Banks! No, It's The Internet!" Many of the links have been broken in the article, but you can use the site's search engine to query each title through cut and paste and get to them. So, was this proclamation correct? Well, fast forward roughly six years later and... Retailer "The Limited" Is Closing All 250 of Its StoresThe Limited" Is Closing All 250 of Its Stores. Yes, all of them! Think about it. There are 21 sq. ft. of retail shopping space for every man, woman and child in this country. What did you think was going to happen to retail?

Women's apparel chain The Limited on Sunday began closing all 250 of its stores across the United States and is slashing 4,000 jobs, the latest casualty of shopping's move online and the growth of fast fashion chains.

And just like Chico's, Ann Taylor and other women's apparel stores struggling with big drops in sales, The Limited has been struggling with shifts in consumer behavior and interest, a greater number of rivals and longer store leases.

"In an increasingly challenging environment for mall-based retail and women's apparel, we are very disappointed that the company has had to make the difficult decision to close its retail locations," the company's private equity, Sun Capital said in a statement.

A message on The Limited's web site said the retailer would continue to sell items online. But it's not clear how much longer that will last: in December, Bloomberg News reported the company was likely headed for liquidation, and on Friday, Sun Capital said it was writing down the remaining equity value of Limited Stores to zero. 

Once a major retailer known for small 2,000 square foot stores selling a limited assortment women's clothing, Limited Stores, founded in 1963 in Columbus, Ohio, fell on hard times in the last decade. The chain was spun off from Victoria's Secret parent L Brands (LB, +0.20%)in 2007 in a leveraged buyout by Sun Capital. In 2010, L Brands, known as Limited Brands until 2013, sold its remaining 25% stake to Sun Capital for roughly $32 million.

And its disappearance will likely add pressure to mall operators like Simon Property Group (SPG, +0.40%) and General Growth Properties (GGP, -1.15%), which are grappling with the bankruptcy in the last two years of mall stalwarts like Aéropostale, Pacific Sun, American Apparel and Wet Seal.

What's more, mall anchors Macy's (M, -0.65%) and Sears (SOLD) are closing hundreds of stores amid large sales declines.

 

 

Any of our long time followers should know that we tore GGP apart in 2007 and 2008, they filed for bankruptcy shortly thereafter. There are literally thousands of pages of research on this and many other companies in our paid archives from back then Paying subscribers, see Home > Research Reports > Real Estate > Commercial Real Estate. Here are some direct links:  folder Commercial Real Estate  and  pdf Reggie Middleton says GGP & the type of investigative analysis you won't get from your brokerage house (554 KB)  - This was a masterpiece (about 700 pages, all told...)

These historical pieces will be coming in handy, because we're back where we started from. 

 

Last modified on Monday, 09 January 2017 14:21

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