181–190 of 226 posts
Has it died? The sale of the Canada arm was finalized only a few days ago[1]. There is no indication that they plan to shut down any time soon. [1] https://www.thestar.com/business/2018/06/01/fairfax-complete...
Retailing seems to be dying in US irrespective of the company: https://www.bloomberg.com/news/articles/2018-04-17/retail-st... Couple of years ago, one of my friends bought a store at a strip mall. The store was making a loss. And the previously owners were an elderly couple. So my friends thesis was that they weren't exactly tuned into the digital presence business and it was still entirely possible to run a store i…
What a trip. I used to go to the Times Square location with people who came in from out of town, as an attraction for when they inevitably wanted to check out Times Square. The article doesn't really do justice to what a spectacle it was (which is saying something, since the article calls it out repeatedly). The person-sized Lego Hulk they built for that store is still my phone background. Made this even more shockin…
Retailing seems to be dying in US irrespective of the company: https://www.bloomberg.com/news/articles/2018-04-17/retail-st... Couple of years ago, one of my friends bought a store at a strip mall. The store was making a loss. And the previously owners were an elderly couple. So my friends thesis was that they weren't exactly tuned into the digital presence business and it was still entirely possible to run a store i…
What I don't get is there are a lot of empty storefronts and places moving that I see... and retailers say the rents are still sky high for those storefronts. Is it really worth the property owners keeping them empty?
There are 2-3 abandoned moderate sized retail buildings in a suburb I pass on my way into work that have sat vacant for the better part of a decade with a big "for sale" sign out front.
On the odd times I look up the listing price, they want high hundred thousands to low million. Keep in mind this is for buildings and land that have not been maintained for years now.
Without a massive surge in pricing, they are already vacant maintained spaces that will capture most interest before that vacant tear-down gets bought.
Earlier quoted context omitted.
What I don't get is there are a lot of empty storefronts and places moving that I see... and retailers say the rents are still sky high for those storefronts. Is it really worth the property owners keeping them empty?
From my personal datapoint, I agree with that question. There are 2-3 abandoned moderate sized retail buildings in a suburb I pass on my way into work that have sat vacant for the better part of a decade with a big "for sale" sign out front. On the odd times I look up the listing price, they want high hundred thousands to low million. Keep in mind this is for buildings and land that have not been maintained for years…
Even when the value of something has fallen (as measured by market comparables, ability to generate incomes like rent, etc) people become anchored to a valuation and think they'll get the price they want if they just hold out a little longer. There's something psychologically difficult about accepting that you aren't going to get the price you want for something; it requires an act of "letting go" that can be hard.
You see this all over the subprime crisis, banks had tons of toxic debt but didn't want to "book" their losses by selling at whatever the fair-market price was that day.
I'm reminded of that old saying from finance, "The market can stay irrational longer than you can stay solvent."
Earlier quoted context omitted.
Why wouldn't it be? Did the PE firm force someone to issue debt for a worthless business? I would hold the lender responsible for due diligence.
The question was more: why does the law allow this? They are using one company to benefit another, then leaving it in debt without financial liability. Seems like a gaping loophole in the law there.
Despite the title and the focus on the form of financing, none of the facts in the article even suggested to me that the company would be in any better shape if it had used equity financing rather than debt. It sounds, rather, like an unprofitable business that no one in their right mind would give any more money. If someone thinks they can figure out how to make a workable business out of big box toy stores, it soun…
You're missing the key piece: Toys R Us didn't go into debt for any good business reason, it was bought by a private equity firm and loaded with debt it didn't need. This is how private equity works: 1. A PE firm uses a combination of other people's money (limited partners a.k.a investors) and debt to buy a company. 2. The PE transfers the debt to the company's books. This way, if the company goes bankrupt the PE fun…
In general, if a business is clearly profitable it should continue no matter how thoroughly you screw up the capital structure: the worst case is a bankruptcy in which the shareholders get nothing, the debt holders get very little, and a new capital structure gets created. When this doesn't happen, it's because the business is worthless or nearly so.
Begs the question, what kinds of local businesses are structurally safe from being disrupted by Amazon? Some that come to mind: * Food - restaurants, fast food, pizza, takeout * Social experiences - bars, cafes, arcades, comedy clubs * Things that can't be shipped - gas stations, perishables * Things you want right away - milk, delis, convenience stores * Things that can't be commoditized - Copying keys * Services -…
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Retailing seems to be dying in US irrespective of the company: https://www.bloomberg.com/news/articles/2018-04-17/retail-st... Couple of years ago, one of my friends bought a store at a strip mall. The store was making a loss. And the previously owners were an elderly couple. So my friends thesis was that they weren't exactly tuned into the digital presence business and it was still entirely possible to run a store i…
retail sounds really perilous to me. there is little to differentiate yourself from competitors. even if you find something, others can just copy.
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.
Toys 'R' Us had "curated" the vast swath of toys that exist down to a handful of the usual fair. Barbie, the latest Pixar toys, the standard board-games.... Like corporate bookstores, theater chains, music stores you got the same selection at all their million outlets in the country. Perhaps it's just me that was tired of the same-ol' same ol' or maybe the public became tired of it as well.
The owners knew it and sold while it was still possible to sell. The buyers gambled that they could cut costs fast enough to compete, but they lost the bet.