First retail ‘name’ to pop off 2018
Discussion
Robertj21a said:
How many years did it take to fill all those Woolworths units ? - and that was well before any recent problems (indeed, are any still vacant ?)
There's plenty of those big BHS stores still empty.
A lot of the Woolworths units around here went to Poundland. If their business model is now failing as well, I am not sure who they would go to next.There's plenty of those big BHS stores still empty.
The only company I can see being interested in the BHS stores is Primark, but that is of little use if they already have a store in that area.
I am seeing higher vacancy rates in my local 'mall' than I have in 25 years of living in the area. They'd rather have vacancies than discount the rent, but I assume there must be a tipping point when the vacancies hit a certain percentage?
hyphen said:
Daily Mail reporting that Sainsbury's and Asda are in advanced talks about a potential merger of some sort.
Always found it strange that Walmart had not been more aggressive to dominate in the UK. Can see Tesco suffering badly from this if it happens.
This was supposed to be hush hush. Will be interesting to see if it goes through. Always found it strange that Walmart had not been more aggressive to dominate in the UK. Can see Tesco suffering badly from this if it happens.
vikingaero said:
It seems that anything with "Private Equity" ownership is failing.
PE are buying businesses, selling freeholds and converting to lease, raiding pensions or failing to pay pensions, charging humongous management fees and then seeking CVA. PE the new scum?
And losIng all their money in the process...PE are buying businesses, selling freeholds and converting to lease, raiding pensions or failing to pay pensions, charging humongous management fees and then seeking CVA. PE the new scum?
Bear in mind the highest profile, and biggest failures this year, have been listed companies.
Alpinestars said:
vikingaero said:
It seems that anything with "Private Equity" ownership is failing.
PE are buying businesses, selling freeholds and converting to lease, raiding pensions or failing to pay pensions, charging humongous management fees and then seeking CVA. PE the new scum?
And losIng all their money in the process...PE are buying businesses, selling freeholds and converting to lease, raiding pensions or failing to pay pensions, charging humongous management fees and then seeking CVA. PE the new scum?
Bear in mind the highest profile, and biggest failures this year, have been listed companies.
The two other businesses that failed don't really matter?
I got the impression the PE spread their bets and generally don't loose in the long term. Some get more involved in running the businesses than others.
Edited by Glade on Sunday 29th April 01:02
Glade said:
Alpinestars said:
vikingaero said:
It seems that anything with "Private Equity" ownership is failing.
PE are buying businesses, selling freeholds and converting to lease, raiding pensions or failing to pay pensions, charging humongous management fees and then seeking CVA. PE the new scum?
And losIng all their money in the process...PE are buying businesses, selling freeholds and converting to lease, raiding pensions or failing to pay pensions, charging humongous management fees and then seeking CVA. PE the new scum?
Bear in mind the highest profile, and biggest failures this year, have been listed companies.
The two other businesses that failed don't really matter?
I got the impression the PE spread their bets and generally don't loose in the long term. Some get more involved in running the businesses than others.
Edited by Glade on Sunday 29th April 01:02
This is a fascinating analysis of the corporate structures that are used to facilitate these ‘buyouts’.. Maplin in this case:
http://www.coppolacomment.com/2018/03/the-sad-stor...
http://www.coppolacomment.com/2018/03/the-sad-stor...
Glade said:
Alpinestars said:
vikingaero said:
It seems that anything with "Private Equity" ownership is failing.
PE are buying businesses, selling freeholds and converting to lease, raiding pensions or failing to pay pensions, charging humongous management fees and then seeking CVA. PE the new scum?
And losIng all their money in the process...PE are buying businesses, selling freeholds and converting to lease, raiding pensions or failing to pay pensions, charging humongous management fees and then seeking CVA. PE the new scum?
Bear in mind the highest profile, and biggest failures this year, have been listed companies.
The two other businesses that failed don't really matter?
I got the impression the PE spread their bets and generally don't loose in the long term. Some get more involved in running the businesses than others.
Edited by Glade on Sunday 29th April 01:02
A) even under the same PE owners, different portfolio groups can have different investors, so for the investors, it's not a portfolio approach. Each investment in that case has to make a return for each investor. Therefore a failure isn't franked by a success.
B) PE houses don't just appear and disappear. Any failure is noted by investors for the next round of fund raising. The odd failure is acceptable, but a track record isn't. It's also bad publicity for the PE house generally.
As far as structures go, it's not that complex really. There are normally a series of holding companies for legal/debt subordination purposes. And often investments go through secondary and tertiary buyouts, where the last structure is inherited by the new buyer, who adds his own holding companies to it. Therefore creating what looks like a complex structure.
Returns are made through (junior debt), and equity put in by the PE house (investors), and borrowing from other lenders (mezzanine/senior). The junior shareholder debt has a relatively high coupon, but it's very rarely paid until exit, ie, it accrues. In the past, when tax relief was available for the interest on this debt, further PIK notes would be issued in lieu of the interest payment. It is therefore never a cash burden on the group on an ongoing basis.
When things go wrong, the first port of call is the investors, who are often asked to put more money in. They have a choice on whether they do or not. They could also trim the junior shareholder debt, therefore reducing their ultimate return, and obviously losing the junior principal amount. Often when things go really wrong, the investors lose everything, with the senior (and sometimes mezzanine as well) lenders taking control. It's therefore never in the interests of the PE house for an investment to fail.
Greg_D said:
kingston12 said:
Commercial property in the current environment looks even more over-valued than residential. It will have to come down eventually, but who knows whether that will be within the next two years.
i have to take issue with that a little bit, commercial property is cheap by any measure for what you get. both new and pre-used. per square foot it is buttons compared to resi.the fact that a number of business models cannot support it is a different issue.
Commercial is cheaper than resi, certainly. But that's only because resi is so ludicrously overvalued.
Sure, there's plenty of apparently cheap commercial, but retail remains expensive. In many areas, retail rents have grown 15% pa on average over 10 years.
Meanwhile prices are flat, wages have stagnated, and housing prices have continued to rise and rise and rise.
Commercial property can only be priced according to the economic activity which can meaningfully be carried out within it. That in turn is a function a of a bunch of macro- and micro-economic factors. And none of those factors are particularly positive.
In places for which there is any desire to live / work, property is in no sense cheap right now. Because resi is wildly out of kilter with incomes, commercial looks "cheap" by comparison.
On the subject of retail return costs.
Looking for running shoes, ordered from reebok, didn't like so sent back. Ordered from Asics too but didn't like them either.
The unusual thing was where they came from, Reebok shipped from Germany in a day or two and went back there, Asics ships from Belgium next day and went back there. Collect+ for Asics and Parcelforce prepaid for Reebok.
These were not some limited edition special event items, just your standard off the shelf items. Appreciate these companies have postal buying power with the amount they ship, but still very surprised that it isn't cheaper for them to ship from a UK base.
Looking for running shoes, ordered from reebok, didn't like so sent back. Ordered from Asics too but didn't like them either.
The unusual thing was where they came from, Reebok shipped from Germany in a day or two and went back there, Asics ships from Belgium next day and went back there. Collect+ for Asics and Parcelforce prepaid for Reebok.
These were not some limited edition special event items, just your standard off the shelf items. Appreciate these companies have postal buying power with the amount they ship, but still very surprised that it isn't cheaper for them to ship from a UK base.
Also some of you may have read this article last month on Next Plc who are struggling and poised for big changes
http://www.bbc.co.uk/news/business-43512375
https://tinyurl.com/yarweh4r
https://tinyurl.com/y9r2yvef
Didn't realise physical travel agents were still busy and an opportunity for growth?
http://www.bbc.co.uk/news/business-43512375
bbc said:
Next said that it planned to roll out more concessions across its store after trying out a number of new services at its shop in Manchester's Arndale Centre.
These include; a florist, a prosecco bar, a restaurant, a children's activity centre, a café, a card and stationery shop, a barber and "shortly a car showroom".
It said that it was in talks to add a spa operator and bridalwear concession to the store and said it expected these steps would add £800,000 worth of income to the shop.
Next also said it was in discussions to add other services to its stores including travel, branded footwear and cosmetics.
"In the year ahead we currently plan to open 98 concessions across our store portfolio and expect to generate annualised income of around £5m from these concessions."
Well true to their word they are putting in place these concessions, starting with TravelThese include; a florist, a prosecco bar, a restaurant, a children's activity centre, a café, a card and stationery shop, a barber and "shortly a car showroom".
It said that it was in talks to add a spa operator and bridalwear concession to the store and said it expected these steps would add £800,000 worth of income to the shop.
Next also said it was in discussions to add other services to its stores including travel, branded footwear and cosmetics.
"In the year ahead we currently plan to open 98 concessions across our store portfolio and expect to generate annualised income of around £5m from these concessions."
https://tinyurl.com/yarweh4r
https://tinyurl.com/y9r2yvef
Didn't realise physical travel agents were still busy and an opportunity for growth?
Edited by hyphen on Wednesday 2nd May 00:05
hyphen said:
And another strange one- Next the clothing/home goods retailer is rolling out travel agent concessions within some of its stores.
Didn't realise physical travel agents were still busy and an opportunity for growth?
Having bucked the trends for a few years, Next has started to struggle recently.Didn't realise physical travel agents were still busy and an opportunity for growth?
It may be that travel is a good way to fill up space not being used by profitable lines?
Equally, in a tough economic climate, those with a little money are inclined to want to buy an escape.
Will be interesting to see how it goes for them.
hyphen said:
Also some of you may have read this article last month on Next Plc who are struggling and poised for big changes
http://www.bbc.co.uk/news/business-43512375
I'm surprised that it mentions cafes as a new thing - most of the Next branches near me that I can think of have in-store Costas. Speaking of which, I see Costa is being hived off from Whitbread - wonder what's prompted that move?http://www.bbc.co.uk/news/business-43512375
bbc said:
Next said that it planned to roll out more concessions across its store after trying out a number of new services at its shop in Manchester's Arndale Centre.
These include; a florist, a prosecco bar, a restaurant, a children's activity centre, a café, a card and stationery shop, a barber and "shortly a car showroom".
It said that it was in talks to add a spa operator and bridalwear concession to the store and said it expected these steps would add £800,000 worth of income to the shop.
Next also said it was in discussions to add other services to its stores including travel, branded footwear and cosmetics.
"In the year ahead we currently plan to open 98 concessions across our store portfolio and expect to generate annualised income of around £5m from these concessions."
These include; a florist, a prosecco bar, a restaurant, a children's activity centre, a café, a card and stationery shop, a barber and "shortly a car showroom".
It said that it was in talks to add a spa operator and bridalwear concession to the store and said it expected these steps would add £800,000 worth of income to the shop.
Next also said it was in discussions to add other services to its stores including travel, branded footwear and cosmetics.
"In the year ahead we currently plan to open 98 concessions across our store portfolio and expect to generate annualised income of around £5m from these concessions."
alangla said:
Speaking of which, I see Costa is being hived off from Whitbread - wonder what's prompted that move?
Took a look - and 2 US Hedge funds and other 'make money fast' aggressors have become major investors in Whitbread over past few months, for no reason other than to force the sale of Costa.The Whitbread board are being forced into it. These investors will no doubt bank their returns and then go and bully someone else.
hyphen said:
On the subject of retail return costs.
Looking for running shoes, ordered from reebok, didn't like so sent back. Ordered from Asics too but didn't like them either.
The unusual thing was where they came from, Reebok shipped from Germany in a day or two and went back there, Asics ships from Belgium next day and went back there. Collect+ for Asics and Parcelforce prepaid for Reebok.
These were not some limited edition special event items, just your standard off the shelf items. Appreciate these companies have postal buying power with the amount they ship, but still very surprised that it isn't cheaper for them to ship from a UK base.
Adidas comes direct from Germany if you order online. They do click and collect in the store. Order to the store, try them on etc. If you like them pay for them. If you dont then just say no thanks and they send them back or keep as store stock. Got the little one some football boots half price like thisLooking for running shoes, ordered from reebok, didn't like so sent back. Ordered from Asics too but didn't like them either.
The unusual thing was where they came from, Reebok shipped from Germany in a day or two and went back there, Asics ships from Belgium next day and went back there. Collect+ for Asics and Parcelforce prepaid for Reebok.
These were not some limited edition special event items, just your standard off the shelf items. Appreciate these companies have postal buying power with the amount they ship, but still very surprised that it isn't cheaper for them to ship from a UK base.
hyphen said:
alangla said:
Speaking of which, I see Costa is being hived off from Whitbread - wonder what's prompted that move?
Took a look - and 2 US Hedge funds and other 'make money fast' aggressors have become major investors in Whitbread over past few months, for no reason other than to force the sale of Costa.The Whitbread board are being forced into it. These investors will no doubt bank their returns and then go and bully someone else.
techiedave said:
Wilkinsons - (Wilko)
Would be very surprised, I have been impressed by them. Seem to be getting it right, opens longer hours, not hampered by the poundland £1 price limit handicap, looks a value chain but (new stores) more clean open and modern, and less dingy than pound shops. Shelves well stocked.
In 2017 they said they had no debt either, also seem invested in click and collect.
Edited by hyphen on Wednesday 2nd May 11:00
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