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Toys ‘R’ Us Didn’t Have to Die

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Re: Toys ‘R’ Us Didn’t Have to Die

#151

Post by DanBC »

isostatic wrote: post #150
kgwgk wrote: post #90

Earlier quoted context omitted.

It's easy to avoid taxes by not making money, but as someone states in the third article you link to: "A wise colleague told me that until effective income tax rates reach 100 percent, a dollar of income is worth more than a dollar of deduction". That's just the apparently-not-so-well-known First Law of Tax: It is always better to have more money than less money.

In the UK some people are taxed at >100% on income, but that aside If you have 100 shops, and rent 11 at $10k a month, and the rest are empty, you get $110k a month If you have 100 shops, and rent 60 at $2k a month, and 40 are empty, you get $120k a month Now lets assume a 50% tax In the first example you keep $55k In the second example you keep $60k Great, go for the second. But now if you make the empty shops a tax…

> In the UK some people are taxed at >100% on income

Do you have any examples please?

Re: Toys ‘R’ Us Didn’t Have to Die

#152

Post by zer0faith »

I worked for a home improvement retailer for a long time, around 2008 they stopped building 120k sq ft stores and moved down to 80k sq ft, Then staff was cut (2010), a few years later (2012) more staff was cut, now they are talking about replacing some staff members with self help robots that have video conferencing to help customers(2014). These traditional retailers are trying hard to stay in the game but i just don't think they can compete and Toys 'R' Us is just another name on the long list of the dead.

Re: Toys ‘R’ Us Didn’t Have to Die

#153

Post by yourapostasy »

daodedickinson wrote: post #84
yourapostasy wrote: post #54

Earlier quoted context omitted.

> Is it really worth the property owners keeping them empty? Yes. It's a tax dodge. [1] [2] The owners "...hold out for higher rents to increase the worth of their properties because value is based on future income stream...They can afford to forego current rental income, waiting for higher-paying tenants because they claim big business losses. Landlords get a tax loss from negative rental income when no rent comes i…

Why do you think riots or war are necessary to change this?

Capital wields asymmetrically greater negotiating leverage in legislative and judicial spheres, and is far more connected through revolving doors in executive arms of government. While tech is the darling of the business press today, a plurality of wealth around the world is represented in real estate. In other words, there are far more landlords than tech bros/> around the world. Worldwide real estate valuation is >$217 Trillion [1], working out to about $5896 USD/ac or 12340 EUD/ha. That kind of valuation isn't materially deflating absent a pretty foundational change. Considering how much other asset markets derive off of real estate, the valuation at stake is much higher, and the resistance to change correspondingly greater.

The way credit and tax are structured around real estate is deeply entwined with how our civilization generally conceptualizes money and the act of exchanging. And the big realty interests (trusts, big brokers, etc.) are using the small players as human shields, what I call the "Grandma Shield" political strategy. Any move to configure the gears of globalization to also crush real estate pricing with competition like it has with supply chains puts up a storm of "think of G'ma's rental income receipts!!!111!!!". This gives them the emotional charge to gin up a lot of political support, and structure "way of life being threatened" political battles.

Globalization has shed blood. The grand hope of globalization was deeply intertwined national economies propel with enmeshed economic pressures an evolution to Western liberal progressive postures and increased global harmony. There are today gaps in that narrative; it remains to be seen if they are patchable or structural. Globalization is the overarching thematic fundament that lends legitimacy to sovereign interference in Syria, Iraq, Afghanistan, South China Sea, Crimea, Falkland Islands, etc., predicated on the current mainstream foreign policy conjecture that turned into the modern globalization effort starting around the WW1 era that non-interference and neutrality leads to even worse outcomes.

Deep structural changes in real estate (and finance more generally) would have to take place in some similar context as globalization, and historically conflict arising to the level of blood shed accompanies changes on such scales because the architects of such changes do not model conflicts into their projections. Like programmers that don't model debugging time into their project plans.

I personally think globalization is patchable, but only starts to make real progress again (we've done a lot so far, possibly stretching beyond our reach by now) by the time we start getting much better modeling of societies that makes today's Summit-based modeling look like a Tinker Toy. There's also the problem that we simply don't know how to model societies at a fine enough granularity to tell with a high degree of confidence (>99%) and consistency (>99%) how broad swathes of people will vote. Lenin thought central planning projection was possible, but it took until today's computer-driven supply chain management to even begin to realistically approach just a pale shade of semblance of his vision of how to perform economic projection, and only at the short-term, reactive micro-economic level at that.

[1] http://fortune.com/2016/01/26/rea-estate-global-economy/

Re: Toys ‘R’ Us Didn’t Have to Die

#154

Post by inetknght »

brandonsometig wrote: post #116
duxup wrote: post #53

Earlier quoted context omitted.

Maybe. It's just strange as I've seen large % of commercial areas stay empty, they keep up the place, but almost nothing in the spaces, for years.

They can borrow against the property at the stated rent instead of what the market would actually pay. As soon as they accept lower rents they can no longer claim it's worth as much in collateral.

That sounds awfully shady

Re: Toys ‘R’ Us Didn’t Have to Die

#155

Post by ben1040 »

pandapunchpower wrote: post #12
gkoberger wrote: post #5

I read the whole article, and I didn't really see a convincing argument that it didn't have to die. Sure, it could have eked out a few more years... but it was living on borrowed time. Not only do most people shop online now, most toys are also online. I imagine most parents put money into TV shows, video games, iPhone apps, etc.

There is some scope for a brick and mortar toy store provided they are willing to be double as a pseudo-playcenter. Toy aisles and toy stores are frequently populated by exhausted parents standing around while their children entertain themselves checking out the toys. The kids are happy enough. The parents are content just to have a few minutes to themselves. Toy retailers typically try and dissuade this behavior. Me…

>Meanwhile indoor playgrounds/play centers are a huge and growing business. They are happy for parents to unleash their children while they make their money from entry charges, selling cups of coffee to the parents and snacks for the kids.

There's a mom and pop place like this near me. They rented an old dead big box store (I remember shopping there when it was a Circuit City) and filled it with bounce houses and arcade games.

They charge $10/kid admission. Adults are not allowed in the bounce houses, and they've got an area set up with tables and free WiFi for the parents. They'll charge you $3.79 for a soda, so overpriced for sure but not quite movie theater or ballpark pricing.

My son begged to have his birthday party there this year. The parties have to be the big revenue driver, as it was $300 for twelve kids' worth of Domino's Pizza and use of a party room for an hour.

Re: Toys ‘R’ Us Didn’t Have to Die

#156

Post by kgwgk »

isostatic wrote: post #150
kgwgk wrote: post #90

Earlier quoted context omitted.

It's easy to avoid taxes by not making money, but as someone states in the third article you link to: "A wise colleague told me that until effective income tax rates reach 100 percent, a dollar of income is worth more than a dollar of deduction". That's just the apparently-not-so-well-known First Law of Tax: It is always better to have more money than less money.

In the UK some people are taxed at >100% on income, but that aside If you have 100 shops, and rent 11 at $10k a month, and the rest are empty, you get $110k a month If you have 100 shops, and rent 60 at $2k a month, and 40 are empty, you get $120k a month Now lets assume a 50% tax In the first example you keep $55k In the second example you keep $60k Great, go for the second. But now if you make the empty shops a tax…

That wouldn’t fly, at least in the US: http://www.habifproperties.com/can-landlords-take-a-tax-dedu...

Re: Toys ‘R’ Us Didn’t Have to Die

#157

Post by isostatic »

DanBC wrote: post #151
isostatic wrote: post #150

Earlier quoted context omitted.

In the UK some people are taxed at >100% on income, but that aside If you have 100 shops, and rent 11 at $10k a month, and the rest are empty, you get $110k a month If you have 100 shops, and rent 60 at $2k a month, and 40 are empty, you get $120k a month Now lets assume a 50% tax In the first example you keep $55k In the second example you keep $60k Great, go for the second. But now if you make the empty shops a tax…

> In the UK some people are taxed at >100% on income Do you have any examples please?

If you're a couple who transfer some of one earner's tax free allowance to the other via the marriage allowance, and the higher earner earns £46,350, they will pay £11,211.32 in income tax and national insurance

If they earn an extra £1, the marriage allowance vanishes, and they pay £11,449.54 in income tax and national insurance

That's a 23,822% tax rate on that pound.

Re: Toys ‘R’ Us Didn’t Have to Die

#158

Post by mkirklions »

zer0faith wrote: post #152

I worked for a home improvement retailer for a long time, around 2008 they stopped building 120k sq ft stores and moved down to 80k sq ft, Then staff was cut (2010), a few years later (2012) more staff was cut, now they are talking about replacing some staff members with self help robots that have video conferencing to help customers(2014). These traditional retailers are trying hard to stay in the game but i just do…

Things that make me go to a store

>Instant

>Helpful employees

Prices didnt matter if I showed up to the store, but it should be cheaper than shipping to your home. Employees should be knowledgeable and helpful.

Instead most stores have the exact products or fewer online, higher prices, and an empty store.

Re: Toys ‘R’ Us Didn’t Have to Die

#159

Post by astura »

coding123 wrote: post #18
toomuchtodo wrote: post #17

Earlier quoted context omitted.

After buying a Serta from Amazon and a Tuft and Needle, I will never buy a mattress again without being able to lay on it first. Disrupted? Try to fit a king foam mattress back in the box to meet return obligations when you don’t like it, before we touch on the counterfeit product issue from Amazon.

T&N just needs to know you donated it with a proof of donation. No back in the box needed.

What sort of places accept mattress donations? I know mattresses are not accepted by most thrift shops like Goodwill. Not only that, but you'd have to get the charity to come to your house and pick it up.

Re: Toys ‘R’ Us Didn’t Have to Die

#160

Post by yourapostasy »

kgwgk wrote: post #137
oliwarner wrote: post #123

Earlier quoted context omitted.

This is only true if there is only one type of tax and it's non-negotiable and immutable over time. For little people like you and me, taking rent is a simple income and forgoing it would be a simple loss. As you say, it wouldn't make any difference for our net taxes. When you own thousands of square meters of [what will be] prime brownfield development space, leaving it unoccupied just hastens the local government t…

I understand that there are many reasons why it may make sense to leave a building unnoccupied, I just don't think that "dodging taxes" (because losing money reduces your tax bill) is one of them. A job-seeker may pass on an offer that he considers too low (because he's confident he will find something better later), no one would say he's doing so to avoid paying income taxes.

Talking about very large real estate portfolio holders like the Vornados of the world, not small investors. In American terms, even newly-minted "accredited investors" can't avail themselves as private individuals to these kinds of strategies. In that context, when you are capitalized enough to land bank the worst-performing parcels until the next boom cycle, it makes sense to let them lay fallow and rejecting rent decreases until the asset appreciation bails out the parcel, and in the meantime use the rental income loss to offset the gains in other parts of your portfolio.

The overall portfolio cash flows profit, and capitalization is sufficient to ride out 10-20 year cycle minima on the minority of the portfolio sitting vacant until asset appreciation works in their favor again. These holdings are so large they overwhelm lay people's sense of what is feasible. This model only breaks down in "perfect storm" secular changes set within a dysfunctional government context like Detroit, and only then do you see true abandonment and not just vacancy.

To these holders, how these vacancies work is a feature, not a bug.

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