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Neiman Marcus files for bankruptcy

reuters.com

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Re: Neiman Marcus files for bankruptcy

#251

Post by chihuahua »

greedo wrote: post #68
ghaff wrote: post #9

Earlier quoted context omitted.

Yeah. It's not just department stores--which I have less direct experience with. A lot of the old line "mail order" outfits like LL Bean, J Crew, Lands' End, etc. (as well as many of the at least semi-premium outdoor clothing/gear/etc. brands) are much more of a both quality and customer service crapshoot than they once were. At the risk of painting with an overly broad brush, when everything is made in the same, mos…

I used to be an Eddie Bauer guy. Shirts, shoes, shorts, jeans, coats, you name it. Spent a good chunk of change at their mall store where you could try stuff on. Overtime, the fabrics got thinner on shirts and jeans. They stopped stocking my size in store. Stuff started wearing out quicker. I tried to order online, but the order fulfillment was hit and miss. Too bad for them...

I still buy Eddie Bauer stuff online occasionally because they still have tall sizes. "Medium Tall" T-shirts are great when you're 6'5" and 175lbs.

Re: Neiman Marcus files for bankruptcy

#252

Post by zone411 »

Ididntdothis wrote: post #57
johntiger1 wrote: post #5

Earlier quoted context omitted.

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.

Except they are not. Ask shareholders and bondholders.

Re: Neiman Marcus files for bankruptcy

#253

Post by igravious »

dweekly wrote: post #249
igravious wrote: post #246

Earlier quoted context omitted.

edit: deleted this chunk of my argument because as pointed out by dweekly Pew Research are already comparing in 2018 dollars. What matters is that U.S. middle-income share of aggregate income fell from 62% to 43% – is this not the usual measurement? This is what people mean by "the middle class is shrinking". It doesn't matter if the average middle-income has increased, what matters in this context is the overall pur…

1. the Pew linked source you give shows numbers in constant 2018 (inflation adjusted) dollars. You seem to be saying in your comment here that the median family in 1970 was making $58,700 in 1970 dollars. It was $9,870 in 1970 dollars per the US Census: https://www.census.gov/library/publications/1971/demo/p60-78... 2: It's interesting to look at debt, but net worth gives a more complete picture as larger assets can…

Yes of course, thanks. Hope you don't mind but I've changed my comment to correct my gross error.

I still think it's odd to argue that the middle class on aggregate are doing better when clearly they are not.

Re: Neiman Marcus files for bankruptcy

#254

Post by zone411 »

fakedang wrote: post #139
1-6 wrote: post #81

The definition of luxury has changed. It's now more about value, utility, and stability. Luxury means owning property in a high-end location, a MacBook Pro, fast optical networks, clean drinking water, and a reliable car.

MacBook Pros are luxury goods now? What someone, such as myself, doesn't really like them, and instead prefers Thinkpads, like most of my peers?

There are few more expensive laptops so I'd say so. The 16-inch 2019 MacBook Pro starts at $2400 and you only get a 512 GB SSD for this price. Apple itself is more of a premium brand.

Re: Neiman Marcus files for bankruptcy

#255

Post by johnvanommen »

toast0 wrote: post #242
johnvanommen wrote: post #222

Earlier quoted context omitted.

> Why don't those landlords just lower their rents to meet demand then? Keep in mind how the concept of an "anchor tenant" works. For instance, Sears had leases that were as long as 99 years long, with rates that were as low as one dollar per year. (No joke: https://www.denverpost.com/2019/09/26/kmart-monaco-evans-den... ) The way that the retail model was structured, back in the 70s and the 80s, was that the anchor…

Where is Fry's acting as an anchor tenant? All of the stores I've seen were freestanding. Often in light industrial areas, not a whole lot of people are going to Fry's and then stop by at the bus upfitter, cause it's right there and they might as well get a commute vehicle for the whole office.

What I'm about to write is pure speculation on my part. Take it with a grain of salt.

I used to work for Sears corporate. Sears got some incredibly good deals on leases. They were known to sign leases that are 99 years long:

https://www.thedenverchannel.com/news/front-range/denver/cou...

This creates a "tug-of-war" between the company that owns the building, and the company that is leasing it.

For instance, in the article posted above, Sears was paying $33,333 a month for their lease.

If the lease is 99 years long, and if the owner of the property can lease it to someone else for $50,000 a month, that creates a problem for the owner.

Basically the owner is in a pickle: they want to lease it to someone else, but as long as Sears is paying the lease, they can't.

So this creates a tremendous incentive for the property owner to buy out the lease holder. It also incentivizes Sears to let the property fall into disrepair. For instance, in the article I posted above, you can see that the community was eager to see something done about that derelict boarded up building.

Here's some math:

1) Sears is paying $33,333 a month on a 99 year lease

2) The property's market value is $50,000 a month

3) There's 50 years / 600 months left on the lease

If you do the math, that lease that Sears has might be worth ten million dollars or more.

Again, pure speculation on my part, but I personally believe that a lot of companies are getting wise to this scheme.

If you've ever gone to your local mall, and wondered why Sears and Roebuck is still open when there are four customers... well now you know.

Re: Neiman Marcus files for bankruptcy

#256

Post by scollet »

rb808 wrote: post #186

People dress very cheaply now. I'm always amazed from historic photos, it seems the further back you go the more money they spent on appearance. These days it just looks like no one cares. I'm surprised upmarket stores lasted this long.

Price doesn't reflect quality. Ever pull a good thrift store haul?

Re: Neiman Marcus files for bankruptcy

#257

Post by gerland »

apsec112 wrote: post #206
igravious wrote: post #201

Earlier quoted context omitted.

> Income for this group did not shrink, it just grew more slowly than other groups Another way of saying that it grew more slowly than other groups is that it shrank .

If your first child grows four inches and your second child grows six inches, you don't say that the first kid shrank.

What are we actually measuring though? Wealth is always relative, so we are trying to measure positions between different groups towards each other. If you give each of your kids 5$ and charge them 5 bucks for a pie and then one of them gets a raise of 10$ and the price of the pie raises to 7$ then the wealth of the other child effectively shrank. "Things should be made as simple as possible, but not simpler".

Re: Neiman Marcus files for bankruptcy

#258

Post by alexpetralia »

jackcosgrove wrote: post #204
alexpetralia wrote: post #197

Earlier quoted context omitted.

No in fact it is precisely the opposite. As GDP growth declines, there is more accumulated investment savings (supply glut of capital) chasing fewer high-returning investments. The savings has to go somewhere, and often it goes into high-yield debt (exactly the type private equity issues). Low growth translates into the increased use of credit.

That would seem to increase risk of loss system-wide though. I'm not arguing what you're saying is untrue as that appears to be what is happening. I'm arguing this behavior is irrational. If investment opportunities decline, investment should decline and sitting on savings should increase.

Unless you literally put your cash under a mattress, savings _is_ investment (e.g. bank deposit being lent out, money market funds invested in corporate paper, Treasury holdings, etc.). The savings is always "held" (invested) in some form of an asset, not cash under the mattress.

Re: Neiman Marcus files for bankruptcy

#259

Post by lilsoso »

scollet wrote: post #256
rb808 wrote: post #186

People dress very cheaply now. I'm always amazed from historic photos, it seems the further back you go the more money they spent on appearance. These days it just looks like no one cares. I'm surprised upmarket stores lasted this long.

Price doesn't reflect quality. Ever pull a good thrift store haul?

There's a phrase, 'cut and cloth'.

Better materials, the basic ingredients, generally increases the price (cloth from quality fabric mills, finer wools, nice dyes, shell buttons, leather, etc...). And the cut matters, to pay for a tailored shirt in England or Italy will cost you -- that is, the labor, design, and construction.

Sure, a high price tag does not necessarily imply quality -- but let's not be fools about the matter.

Re: Neiman Marcus files for bankruptcy

#260

Post by formercoder »

johnvanommen wrote: post #228
gamblor956 wrote: post #194

Earlier quoted context omitted.

The financial structure of a LBO is that a PE fund uses the assets of an acquired company to pay for the acqusition. They generally put little if any of their own money down other than as earnest capital. They then take out additional loans using the acquired company assets as collateral and pay themselves distributions out of those loans. The acquired company is left to repay the massive and increasing debts. You do…

There's a great CNBC show called "The Profit" which really makes it easy for a layman to understand how private equity works. On the show, it's interesting to see how the investor who is putting up his money is often uninterested in investing in a company that's growing quickly and making good profit margins. I can only speculate on what the investor's true motivations is. But there was one episode in particular whic…

It’s way, way more complicated than that. There are the LPs, who sometimes have clients / constituents, GPs, who can be complex entities or individuals or both, operating partners, banks, who obviously wouldn’t lend for LBOs if every one of them busted, equity owners of the target, debt holders of the target, management of the target. All of these parties have their own incentive structures which are lined up in order for an LBO to take place.
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