bookmark_borderAMC Theatres casts doubt on remaining in business

AMC Theatres may not be able to survive the coronavirus shutdowns, the company revealed in its latest regulatory filing.

The company, the world’s largest movie theater chain, told the Securities and Exchange Commission that it had “substantial doubt” it could withstand the reopening process, despite securing credit lines and restructuring debt to help it endure the current landscape.

AMC acknowledged as causes the uncertainty around the timing of reopenings, the altered capacity quotas many locations will face, and the reconfigured calendar for new releases. With 40% of ticket sales typically going to customers over the age of 50, who may be slow to return to a crowded movie theater, the company needs to work toward an operating model that can keep its doors open.

bookmark_borderThe coming effects of looting on urban retail

One thing After Shopping hadn’t anticipated upon launch was the potential impact of looting on the retail landscape. An unfortunate side effect of recent protests is the ancillary result: groups of instigators and opportunists, seeing an outlet in the mayhem, trashing all manner of stores in all manner of neighborhoods.

An article in today’s New York Times sums it up well: amid the crowds and their waves of anger, some of those waves are cresting with shattered windows and emptied stores. The result is shopping corridors gutted of commerce, and storefronts likely to be shuttered for weeks or months, as shop owners grapple with replacing fixtures and merchandise, making essential repairs, and negotiating with insurers.

We will be looking for news on the fallout of these actions in the coming days and weeks, once the protests—and looting—calm down and retailers begin to take stock of the damage.

bookmark_borderRecap: May bankruptcies

CNN summarized May’s bankruptcy filings by retailers and other consumer industry operators, including a few covered in this space as well as some new notes. Among them:

  • Department store chains JC Penney and Neiman Marcus
  • Discount home goods retailer Tuesday Morning
  • and Gold’s Gym, which vows, “We are absolutely not going anywhere.”

As noted in the article, “A bankruptcy filing doesn’t necessarily mean a company will go out of business. Many use bankruptcy to shed debt and other liabilities while closing unprofitable operations, in hopes of emerging leaner and stronger. … Still, many other brands that have filed for bankruptcy with the intention of staying in business didn’t survive.”

One Axios commentator thinks the corporate bankruptcy wave has just gotten started, noting that many of the ones to date had pre-existing financial stressors prior to the lockdown period. More filings are likely to follow as the full impact of the virus on retail sales becomes more clear.

bookmark_borderNear-term effects

Something to look out for in the near term in shopping is a glut of merchandise in non-essential segments. Fashion, for one, will be dealing with high inventory levels as stores reopen, particularly at fast fashion chains like H&M. This could mean good deals for shoppers, as well as headaches for sellers, who need to clear out merchandise and make room for upcoming stock, presuming supply chain disruptions have been kept to a minimum.

The Wall Street Journal speculates that retailers might see “years of depressed profit margins” as they try and reset after the pandemic—and that savvy shoppers could snap up some great deals this summer.

bookmark_borderThe store of the future is now the store of the present

Modern Retail has begun a series on store reopenings post-lockdown, starting with today’s piece on what stores will look like this summer.

Their takeaway: expect carefully thought-out experiences that begin before shoppers even get to the door. Gone are the days of wandering into a store to browse. Instead, we’ll see more queuing, curbside pickup, and lots of communication about how and why. We’ll see an increased reliance on technology from introduction to post-purchase. And, more often than not, employees will be wearing masks.

There’s a lot more detail in the piece, which is very much worth the read. (h/t LeanLuxe)

bookmark_borderBrands rushing to adapt to pandemic-era shopping

From CNN Business, a report on how brands are working on understanding the changed retail landscape—”the shift to online buying is accelerating, consumers are buying more products for their health and home, and they are becoming increasingly cost conscious”—and the ways they can adapt.

While the situation is fluid, leading to a pressing need for flexibility, the brands discussed here all acknowledge the likely permanency of a greater ecommerce footprint, and of consumers’ greater need for cleaning supplies, soaps, and groceries high in zinc and vitamin C.

bookmark_borderEcommerce trends during the shutdowns

While this site is focusing on retail, it would be impossible to ignore the powerful surge of ecommerce that is occurring this spring, from Instacart shoppers to food delivery to Amazon’s getting so busy it had to slow down Prime shipping times.

Digital Commerce 360 published an interesting set of ecommerce charts and data today showing the pandemic’s impact. Online grocery in particular has skyrocketed, but all of ecommerce has seen a huge boost, giving momentum to a retail industry that has seen 11 noteworthy bankruptcies this year, six since the crisis began.

bookmark_borderRecasting Stores in a Pandemic and Its Aftermath

Women’s Wear Daily spoke with numerous industry experts on how retail is changing in the moment (WWD; full text). The lede notes that the coronavirus is “forcing retailers to make immediate adaptations for social distancing and sanitizing, while accelerating changes already in motion.”

Among the changes that have, or will soon, take root:

  • hospitality-driven renovations—think spaciousness and service, with changes in how shoppers flow through a store
  • boosting connectivity, from online pre-shopping to altering the lighting in a fitting room with a cell phone
  • increased service options like curbside pickup and appointments

“Simpler” seems to be the prevailing theme, with the thought that sanitization will lead to fewer, smoother surfaces and more contactless experiences like automatic doors.

bookmark_borderAfter shopping?

This blog is dedicated to understanding what has happened, is happening and is going to happen to the retail storefront industry in the United States due to the covid-19 pandemic.

Most Americans have basically stayed home for two months. And that means they are shopping on site a lot less. Outside of “essentials”—groceries, medicine, gasoline, the occasional piece of hardware—a hundred million Americans temporarily stopped exercising their in-store browsing muscles.

The move away from stores has been slowly building for years, thanks to the steady expansion of ecommerce. But it was largely buoyed by a growing economy, allowing for bricks and clicks to coexist. Now, that trend has been exacerbated at both ends: by people who haven’t been able to go to stores, and are happier than ever to pay for shipping and delivery; and by those who are suffering, financially or physically, and aren’t shopping at all.

Shopping is a big deal. Broadly, personal consumer expenditure is a $14 trillion contribution to the American economy and represents 70 percent of GDP. We shop, therefore we are. But now we’re shopping differently, and less, at least temporarily. Retail spending dropped 8% in March and another 17% in April, record numbers, and while they are expected to rebound, no one is sure exactly how.

The outcomes of this will be fascinating. There will be good news, like huge and sustained increases in the manufacture and sale of certain goods, and bad, like many stores that closed in March and will not reopen. Already we’ve seen multiple bankruptcies in the fashion and retailing industry and announcements of restaurants saying goodbye. This site is intended to track that news. Large and small, we’ll try to paint a picture of what this landscape looks like, and track its imminent evolution.

The person behind this is David Wertheimer, a longtime ecommerce executive and blogger, who last tracked these trends in the wake of the financial crisis on the site Timely Demise. There’s nothing timely about what’s going on now—only causes and effects beyond most everyone’s control. It won’t always be fun to read, but it will always be interesting. Thanks for visiting.

bookmark_border“A Weekend Shopping Trip under Coronavirus”

Last week, three Wall Street Journal correspondents went shopping, to see what it’s like to be at the mall in places where the mall is open.

The experience: complex social dynamics from consumers and employees alike, with a broad spectrum of concern and preparation for the coronavirus. And lots of closed stores—in Toledo, more stores stayed shuttered than chose to reopen. Still, shoppers formed lines outside the shops that were open, roughly half of them choosing to don masks.

One of this piece’s authors also coauthored an opinion column a few days prior that posited many chains would not return from this year’s disruption. This piece points out that as many as 100,000 store closings were already predicted prior to the shutdowns.