Retail: Trump meeting with CEOs, more bankruptcies, auctions
The U.S. national retail vacancy rate has remained unchanged for the fourth straight quarter, despite the ongoing store closures, according to Reis. U.S. retail real estate vacancies registered 10 percent during the first quarter 2018.
During the first few months of 2018, there were several big-name retail bankruptcy filings, including Nine West, Claire’s, The Walking Co., Bon-Ton Stores Inc., Kiko USA and A’gaci.
In other 2018 retail news, Toys ‘R’ Us ended its plan to emerge from U.S. Chapter 11. The retailer had 1,600 stores when it filed for bankruptcy protection in September 2017. The company said it will liquidate its U.S. and U.K. operations. And Reuters reported Toys ‘R’ Us received multiple bids of more than $1 billion for an 85 percent stake in its Asian business.
Also, craft retailer Michaels announced plans to close 94 Aaron Brothers framing and art supplies stores. Michaels owns and operates about 1,300 stores in the United States and Canada. Aaron Brothers reported $110 million in sales in Michaels’ last fiscal year. Michaels said it would cost between $37 million to $42 million to shut the Aaron Brothers stores and that the process would be completed by July 31.
And Sears Holdings announced plans to use an online auction platform for 16 store properties. The stores — most of them in Texas, Missouri, Ohio and Indiana — range between 100,000 square feet and more than 240,000 square feet. Bids for the properties are due May 1.
The U.S. Census Bureau reports that retail sales for February rose 4.0 percent year-over-year. For the period of December 2017 to February 2018, sales were up 4.3 percent from the same period the year before. E-commerce sales increased, jumping 16.9 percent in the fourth quarter year-over-year.
The National Retail Federation projected that retail industry 2018 sales will grow between 3.8 percent and 4.4 percent from last year. Online and other non-store sales, which are included in the overall number, are expected to increase between 10 percent and 12 percent. The numbers exclude automobiles, gasoline stations and restaurants.
E-commerce — and particularly Amazon — has been dubbed a threat to these retailers. Even President Donald Trump has railed against Amazon. President Trump tweeted in March that Amazon was “putting many thousands of retailers out of business.” And on April 3, Trump said, “the post office is losing billions of dollars” and “unlike others, they [Amazon] pay little or no taxes to state and local governments, use our postal system as their delivery boy [causing tremendous loss to the U.S.].”
The National Retail Federation's CEO Matthew Shay and several retail CEOs on the NRF Executive Committee, including Christopher Baldwin, BJ's Wholesale Club CEO and chairman of the NRF Board of Directors, met with President Trump and other senior administration officials at the White House Wednesday to discuss issues facing the retail industry.
And this month, the U.S. Supreme Court will hear a case, South Dakota v. Wayfair, Inc., which will determine whether state government officials may collect an Internet sales tax on purchases coming from a seller that is not physically present in a consumer’s state.
CNBC reports big-box retailers will support the Internet sales tax because it’s a way to burden small competitors, potentially putting some out of business.
The battle between Amazon and other U.S. retailers continues.