151–160 of 276 posts
First guess: private equity? Neiman Marcus, laden with debt after a private equity takeover, Yup.
Wow, why don't people wise up to this PE trick? Seems like creditors would learn their lesson after so many examples...
I'm not glad these stores are doing bad, but I just never understood how a pair of sneakers can cost $700 - $900 when I can buy a decent laptop with that kind of money.
"I just never understood how a pair of sneakers can cost $700 - $900 when I can buy a decent laptop with that kind of money." I just never understood how a laptop can cost $700 - $900.
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Could you tell the difference at a glance from something from Neiman Marcus and a clone of that shirt sold by target? I can't.
Absolutely not, that's why I'm questioning why any of these are being described here as "luxury brands." A t-shirt from a luxury brand could cost several hundred dollars, none of these stores carry anything like that. This is all shopping mall grade.
Someone out there is wearing haute couture hand-sewn by artisans. Your hundred dollar shirt is laughable to that tier. But for the majority of the world, I think Nordstrom would largely count as "luxury"
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In fairness, conspicuous consumption is one of the primary draws of Vegas. Probably not a very representative example.
And it's also a one-off, in a national and international sense. It's like judging consumption levels in the Muslim world by Dubai.
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I'm not a fan of private equity but I'm also not a fan of rants directed my way when I'm answering a question someone asked. Please take this somewhere else.
sorry if this came across as directed at you somehow. you seemed to have a more detailed understanding of the moving parts, so I figured I could throw a super simplified version of my understanding at you and see if it is a valid simplification or an invalid one. I'll interpret your answer as "invalid" for now. :)
Banks infrequently get "hung" with loans and these usually are just bad deals that somehow got through. There are more hung loans now on deals that might have been okay under normal economic circumstances but are not feasible right now.
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Wow, why don't people wise up to this PE trick? Seems like creditors would learn their lesson after so many examples...
I am pretty sure except the employees all participants are making good money off these deals.
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The Maplin explanation: http://www.coppolacomment.com/2018/03/the-sad-story-of-mapli... > Further down the corporate structure, Maplin Electronics Group (Holdings) Ltd. mainly seems to exist to drain Maplin Electronics Ltd. of profits. On the books of Maplin Electronics Group (Holdings) Ltd. is an intercompany loan to Maplin Electronics Ltd. at an interest rate of 10%. The interest charge on this loan was sufficient…
None of those entities mentioned in there are creditors except Lloyds. Private equity deals sometimes have complex capital structures with absurd entity names but creating a "shell company" as described earlier doesn't allow you to get away with theft.
Everyone talks about the "Amazon effect" but the changing distribution of income is also worth considering: " Retail is suffering because the middle classes have lost $1,355 trillion in income since 1970 " http://www.smashcompany.com/business/retail-is-suffering-bec...
Everyone talks about the "Amazon effect" but the changing distribution of income is also worth considering: " Retail is suffering because the middle classes have lost $1,355 trillion in income since 1970 " http://www.smashcompany.com/business/retail-is-suffering-bec...
I don't buy that explanation. A lot of traditional mall and department store retail is suffering, but other kinds of retail is doing great selling to middle-class Americans. Examples include Home Depot, Lowes, Walmart, Target, and Amazon. They are winning because they offer more convenience to customers as a result of their size, selection, and online presence. Besides, this article is about a luxury retailer, not th…
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Thanks for that. But why is the company now worse off than before? A company can be funded with equity or debt (different terms and obligations, I understand) but if a company converts 100% of its outstanding shares to debt, why does anything change? I assume this is what happens when a company takes itself private to escape the grind of quarterly earning, short-term growth, tyranny of Wall Street analysts, etc. If I…
Becuase the risk of investment is now structured differently with leverage. Let's pretend we live in world where companies are always worth 10x earnings + assets. Our pretend company $100M makes $5M in earnings and has $50M in assets (cash, real estate, etc..) To take the company private, the lenders require an interest of 10% and 10% principal Some PE company (or the CEO, whatever) thinks they can make this work, so…
It's my understanding that the bankruptcy applies only to the purchased subsidiary, so the PE firm only stands to lose the principal they put in at the start.
If so, it sounds like the PE firm gets all the upside, but is less exposed to the downside. So they are incentivized to rachet up the risk.