George Whalin wrote about the tough times for apparel retailers. He highlights the closure of RUEHL and Eddie Bauer's bankruptcy. It is estimated that Eddie Bauer's restructuring could result in 120 store closings.
Meanwhile, Passions of a Zealot also looked at the demise of Abercrombie & Fitch's RUEHL. He writes that the failure was in part due to the firm's arrogance.
Abercrombie's downfall with Ruehl (and the considerable sales drop at other Abercrombie brands of late) came from their arrogance to refuse to acknowledge the state of the economy and price their clothes accordingly – or at the least, provide sales or discounts or specials. For almost a year now Abercrombie's President and CEO, Mike Jeffries has continually stated that Abercrombie (and affiliated concepts) are premium brands, discounting them or placing sales on their products – even temporarily – will damage the reputation of the brands and make it more difficult for the brands to return to their premium status.
Here are some other news and notes on retail and retail real estate from around the Web today.
- Some good news first. Bloomberg's U.S. economy preview noted that consumer spending in the U.S. probably rose in May for the first time in three months.
- We posted a feature about how mixed-use developers remain committed to the hospitality sector.
- The Retail Doctor wrote a post with some interesting tips for retailers looking for good locations: Check the trash.
Find out the trash collection days and times for your intended area. Go and observe how many have put their trash out prior and you'll have a good indication of how dynamic your neighborhood really is.
- Wal-Mart is having some trouble with its in-store clinics, according to Business Week. Two years ago it said it planned to open clinics at 400 of its stores by 2010. By February 2008, the firm had been able to get 78 up and running so far. Now, however, it is down to 31 due to failed venture-capital collaborations, a few faulty partnerships, and a reassessment of the business model. In other health and retail news, the Mayo Clinic is opening a location at Mall of America. Officials aren't sure yet what services the site will offer, but they could include diagnostic screenings, wellness counseling and other services that might direct patients to the home campus in Rochester, Minn.
- Aeropostale, one of the few bright spots in the apparel sector, is launching a new kids concept called P.S. VMSD has more. "The company says the concept offer trend-right merchandise at compelling values within a fun, playful and inviting store environment. The first P.S. from Aeropostale store is planned to debut in June, with an online component shortly thereafter."
- You've probably noticed of late that Pizza Hut has been hawking everything but its pizza. It's pushing its P'Zone thing and its pasta. This, apparently, was in a run-up to a adding a secondary branding mark for the franchise. As the Consumerist reports, it will now also be known now as "The Hut".
- The Wall Street Journal reported on some troubles among booksellers. It also has a report on how land deals are helping developers muddle through the downturn in new building.
- There were a flurry of stories appearing today taking up the "commercial real estate is the next shoe" angle. PropertyWire had a piece about property values being down up to 33 percent from peaks in some markets. The numbers were gleaned from the latest PwC/Korpacz Real Estate Investor Survey. Baltimore's CityBiz Real Estate also reported on the survey. Meanwhile, Reuters summarized a new Realpoint report that showed yet another rise in CMBS delinquencies. Steve Christ wrote at Examiner.com about the day the mall died--a summary of the bleak picture for retail real estate. The WSJ, meanwhile, reported on the latest stats from Moody's, which indicate the commercial real-estate prices fell 8.6 percent in April. And in the bleakest story of all, Reuters reported on comments from a head analyst at Deutsche Bank Securities who said the The U.S. urban commercial real estate markets probably will not recover until 2017. It seems a little absurd to me to project 10 years out, but what do I know?
- There were also more stories looking at how REITs have raised cash. This is an angle that's gotten picked up by a lot of publications, including us. Today, both Fortune and the New York Times wrote about the trend.
- Home Depot celebrated its 30th anniversary.
- China electrics giant Gome plans to raise $417 million through an investment from U.S. private equity firm Bain Capital.
- The Boston Globe has an update on the coffee wars. McDonald's is gaining ground on Starbucks and has now passed Dunkin' Donuts.
- Finish Line has struck a deal to sell its 75-unit Man Alive brand for $7 million.
- Lastly, there's an update on Atlantic Yards.
Bruce Ratner had originally had agreed to pay $100 million to the Metropolitan Transit Authority for a nine-acre site where a railyard is located, but with the economy slumping, the developer had asked to defer some of the payment. The revised agreement, which became public on Monday at a meeting of the authority's finance committee, would call for Mr. Ratner to pay $20 million up front for the property, and $80 million in deferred payments for the air rights — a payment scheme that would stretch out until 2031.