Our Covid-19 response -- like virtually all policy -- is being shaped by people who are leading protected lives. They personally have little at stake economically to counter their natural concern that one day they might be accused of having done too little. But sweeping protective measures now in force carry such high costs that we must wonder how deep cost/benefit analysis has been, and how much sensitivity there has been to the lasting damage being inflicted on countless vulnerable lives. Locked Down and Out Our current lockdown was …
Finance
What Retailers Really Need Now
Besides online sales, what retailers need most right now is rent relief, in any size, shape or form! Many of them may need rent abatement for the entire time they are closed. Retailers, even the golden children, direct-to-consumer brands, are having a make or break moment. The cost of overhead is one of their largest expenses and with none-to-few revenues; this imbalance will be a retailer killer. In a normal environment there would be lots of guidelines and a legal framework to follow, AKA your lease. But this roadmap may not be enough. These …
Reflections of a Trade War Correspondent
In the words of New York Times Columnist Paul Krugman, "At this point I've lost count of how many times markets have rallied in the belief that Trump was winding down his trade war, only to face announcements that a much-anticipated deal wasn't happening or that tariffs were being slapped on a new set of products or countries." While this could be the genesis of a new drinking game, the current tariff tumult, which it appears has reached a truce, is hardly entertaining for procurement officers who are trying to strategize around the shifting …
My Optimistic 2020 Playbook…with Caveats
Heading into the home stretch of the 2019 Holiday season it looks like a bipolar mix of optimistic mania on one extreme and relative ho-hum on the other. Customer Growth Partners holds the mania ticket, predicting 5.6 percent growth (even up from their original 4.3 percent). And at the opposite pole, NPD is forecasting a relatively unexciting 2.7 to 3.2 percent. With six fewer shopping days between Thanksgiving and Christmas this year over last and high levels of inventory due to early over-buying to offset potential tariff increases, I would …
Here’s What Recent Store Closures Have in Common
This isn't another article prattling on about the so-called "retail apocalypse." Instead, we are going to take a look at what the retailers that are closing up shop have in common, as well as what they could have done differently if they wanted to stick around. Retailers that are going bankrupt or shuttering stores this year may not appear to have many similarities at first glance. But many struggling retailers that appear to be on opposite sides of the spectrum--such as Topshop and Kmart--have far more in common than meets the eye. Apparel …
The Economy: Drums of Uncertainty Beat Louder and Closer
Just a year ago I wrote that Q2 2018 was a wonderful quarter with GDP jumping 4.3 percent. However, I suggested that the hyperbole coming out of the Trump administration that we're roaring back to a 4+ percent growth economy was just that. Hyperbole. Most economists believed that this positive blip was a result of the new tax breaks and a minimal increase in wages, a proverbial one-off, which, indeed, it was. They believed that the blip would settle back into a 2 to 2.5 percent economy, which, indeed, it did. And since 70 percent of our GDP is …
The Economy: Drums of Uncertainty Beat Louder and CloserRead More
Ulta is a “Buy and Hold”
Wall Street continually sets itself up as a "short-termer," a piñata stuffed full of a bunch of day-traders that I can't whack at hard enough on behalf of the publicly-owned, legacy retail sectors. These are the retailers who are doing the enormously hard and complex work to strategically transform their business models to compete in our new tech-driven world. And these are the businesses that 99 percent of the "short-termers" only know by the numbers. Strategy? What's that? Much less long-term strategy? Forget it! On the other hand, …
Wall Street Quandary: Investing in New Food
Why have investors gone nuts for Beyond Meat, the maker of a vegetable-based meat alternative? And "nuts" is an apt term. Beyond had its IPO in May at $25 per share that raised $240 million for Beyond and gave it a market valuation of $1.5 billion. That's good enough for a new company, but it's not the end of the story. Shortly thereafter, the stock price blew the roof off by increasing rapidly to as much as $234 by the end of July. That's really good for a company that has never turned a profit and has limited availability of its …