Business Failures

[David Horn]

(09-19-2017, 02:14 PM)Warren Dew Wrote:

(09-19-2017, 12:27 PM)pbrower2a Wrote:

Quote:One of the biggest names in brick-and-mortar retail has filed for bankruptcy protection.

Toys R Us, which has some 1,600 Toys R Us and Babies R Us stores around the world, filed for Chapter 11 in a Virginia court late Monday over $5 billion in long-term debt. The company said the debt had prevented it from investing to compete in what it called “an increasingly challenging and rapidly changing retail marketplace worldwide.”

Toys R Us plans to continue to honor gift cards, rewards points, warranties and return policies. It also said all of its stores would operate “as usual.” However, that may not last.  

Underperforming stores will close, The Wall Street Journal reported, and those that remain open may be reconfigured to include “experience-based” elements such as play areas.

There was no word yet on how the moves would affect the company’s nearly 65,000 employees.

http://www.huffingtonpost.com/entry/toys...mg00000009

Demographics may be killing the toy business -- fewer children. Toys that used to be expensive are cheap, especially if they have electronic bases. The business is ferociously competitive, as shown by prior bankruptcies of Kay Bee Toys.

I'm also guessing that children are no longer showing as much attention to 'status symbols'. It is also telling that Toys 'R' Us goes out of business about as the last Millennial kids are in the toy 'market'.

This is a restructuring, not a liquidation.  The store will stay around.

I think it's more of a competitive market driving a poor competitor out of business than a sign of industry decline.  The shopping experience at Toys'R'Us is fine for the kids, but terrible for the parents:  the store arrangements seem like they are specifically designed to make parents lose track of their kids if they let them get more than about 20 feet away.  Contrast that with the Lego Store, which is not only arranged with good sight lines for keeping track of kids, but also has a minder at the front of the store to prevent kids from escaping.

I'm happy to take the kids to the Lego Store or even the Barnes & Noble toy section, but if we're going to Toys'R'Us, I generally require them to know exactly what they are buying, and to agree not to browse, so as to minimize the chances of getting separated.

Let's not discount the imposed debt service from their purchase by KKR and Bain Capital.  Venture capital tends to bring more burden than most already weak companies can bear.

[Ragnarök_62]

(09-19-2017, 12:27 PM)pbrower2a Wrote:

Quote:One of the biggest names in brick-and-mortar retail has filed for bankruptcy protection.

Toys R Us, which has some 1,600 Toys R Us and Babies R Us stores around the world, filed for Chapter 11 in a Virginia court late Monday over $5 billion in long-term debt. The company said the debt had prevented it from investing to compete in what it called “an increasingly challenging and rapidly changing retail marketplace worldwide.”

Toys R Us plans to continue to honor gift cards, rewards points, warranties and return policies. It also said all of its stores would operate “as usual.” However, that may not last.  

Underperforming stores will close, The Wall Street Journal reported, and those that remain open may be reconfigured to include “experience-based” elements such as play areas.

There was no word yet on how the moves would affect the company’s nearly 65,000 employees.

http://www.huffingtonpost.com/entry/toys...mg00000009

Demographics may be killing the toy business -- fewer children. Toys that used to be expensive are cheap, especially if they have electronic bases. The business is ferociously competitive, as shown by prior bankruptcies of Kay Bee Toys.

I'm also guessing that children are no longer showing as much attention to 'status symbols'. It is also telling that Toys 'R' Us goes out of business about as the last Millennial kids are in the toy 'market'.

And... A place on teh interwebs came up with this:    http://www.zerohedge.com/news/2017-09-20...o-explains

Tidbits:



Reason number 1: Peter Pan syndrome in the C suites:



2. This has to be an org chart to optimize tax savings at the expense of knowing what is really going on.


3. Remember Mitt Romney?   His hedge fund was one of the blood sucking parasites the levered this baby up. I have more respect for ticks than folks like Romney.

[pbrower2a]

The trouble:

1. D--T! The company was over-leveraged,  and because it was paying so much in debt service it could not upgrade its stores and displays.

2. 40% of all vendors were demanding cash on delivery. That's how things go with a fecal credit rating.

3. Hit at the start of the holiday-buying season (for retailers).

(from Zerohedge):

Quote:Given that, it's somewhat ironic that Bloomberg notes this morning how important Toys "R" Us is to vendors and how Mattel and Hasbro couldn't possibly allow the company to liquidate.

   Rest easy, kids. Toys “R” Us Inc. isn’t going anywhere, at least not if the makers of Barbie and Transformers have their way.

   

   Yet, the company, which operates about 1,600 stores globally, will likely survive because manufacturers such as Mattel Inc., Hasbro Inc. and closely held MGA Entertainment Inc. need the last remaining toy chain. These vendors are eager for whatever remaining leverage they have against the might of Amazon and Wal-Mart, the bane of all companies focused on a single category of shopping.

   

   “Oh my God, they are very important, and people don’t understand,” Isaac Larian, founder and chief executive officer of MGA, said of the toy chain. “That’s the only place where kids can go and just buy toys. There is no toy business without Toys ‘R’ Us.”

   

   In many respects, suppliers have been propping up Toys “R” Us for years, according to Moody’s Corp. analyst Charlie O’Shea; they give the chain exclusive products during the holidays and funds for promotions to help it compete with the general merchandisers. The manufacturers offer this support because they want a place to sell toys at full price, year round. Major brands have also been funding an overhaul of Toys “R” Us stores by adding more featured areas for top brands such as Mattel’s American Girl dolls.

   

   In the toy business, the incentive is particularly powerful. Last year, Toys “R” Us accounted for 11 percent of sales at Mattel and 9 percent at Hasbro -- the second most at both companies after Wal-Mart.

Meanwhile, many have speculated this week over how/why TOY bonds traded off 75 points on the company's filing?  How could they be so wrong?  While the timing of the filing was probably somewhat of a surprise, we can't help but wonder whether this simplistic org structure might have contributed in some small way?

It might survive, most likely propped up by vendors who like a retailer that does not discount. But propping up a troubled client is an expensive proposition. But as the only seller charging full price for toys is turning a no-discount habit largely into a way of paying interest to creditors... I see a company on the brink of death. Life support, to be cut off when the moribund entity is no longer useful. Vendors will find alternatives. Sure, Toys 'R' Us sells toys at list price. But that is nothing if the benefit goes to a bunch of creditors.

It isn't pretty.

Quote:Although it should be dead, the company in Bureaucracy is kept alive by artificial life support. The company was born the first time in Infancy, it was reborn in Adolescence, and its third "birth" is in Bureaucracy when it gets an artificial continuance on its life. Death occurs when no one remains committed to keeping the organization alive. If there is no business or government commitment to supporting a company in Recrimination, death can occur instead of bureaucratization.

In the Bureaucratic stage, a company is largely incapable of generating sufficient resources to sustain itself. It justifies its existence by the simple fact that the organization serves a purpose that is of interest to another political and business entity willing to support it. The Bureaucratic organization:

• Has many systems and rules and runs on ritual, not reason.
  
• Has leaders who feel little sense of control.
  
• Is internally disassociated.
  
• Creates obstacles to reduce disruptions from its external environment.
  
• Forces its customers to develop elaborate approaches to bypass roadblocks.
  

http://adizes.com/bureaucracy/

[pbrower2a]

So the creditors want to keep it going so that its operations can defray taxes and property insurance on property to be sold for new use (basically the company is worth more dead than alive, but nobody dares say that directly); vendors see it as a way to sell the vendors' wares at terms that the vendors like; the company has a monopoly due to a patent on a component that a customer needs, especially for 'defense' contracts; it may be the last survivor of a once-significant industry or specialty in business. Basically the company becomes a satellite firm that can be liquidated at any moment. Customers may be looking for alternative sources, and when those appear the 'bureaucratic' company dies.

Other possible examples are former government assets recently privatized that have never need concern themselves with sales or marketing or former divisions of businesses that have been bled of cash and have no idea of how to enjoy independence (and profitability), or regulated monopolies.

[pbrower2a]

I saw this in Wikinews. It is a British company, a giant engineering firm. I am not sure of any exposure in the USA, but it may be worth looking at.

Carillion plc is a British multinational facilities management and construction services company headquartered in Wolverhampton, United Kingdom. Listed on the London Stock Exchange, the company experienced financial difficulties in 2017, and went into compulsory liquidation on 15 January 2018.

Carillion was created in July 1999, by a demerger from Tarmac, which was founded in 1903; the new company included the former Tarmac Construction contracting business and Tarmac Professional Services.[3]
[/url]


In September 2001, Carillion acquired the 51% of GT Rail Maintenance it did not already own, thereby creating Carillion Rail.[4] In August 2002, Carillion bought Citex Management Services for £11.5 million[5] and, in March 2005, it acquired Planned Maintenance Group for circa £40 million.[6] After that, in February 2006, Carillion went on to acquire Mowlem, another United Kingdom support services firm, for circa £350 million[7] and in February 2008, it acquired Alfred McAlpine, yet another United Kingdom support services firm, for £572 million.[8] Then, in October 2008, Carillion bought Van Bots Construction in Canada for £14.3 million.[9]

In April 2011, Carillion bought Eaga, an energy efficiency business, for £306 million,[10] and in December 2012, it acquired a 49% interest in The Bouchier Group, a company providing services in the Athabasca oil sands area, for £24m.[11] Then, in October 2013, the company bought the facilities management business of John Laing.[12]
In August 2014, the company spent several weeks attempting a merger with rival Balfour Beatty. Three offers were made; the last bid, which valued Balfour Beatty at £2.1 billion, was unanimously rejected by the Balfour Beatty board on 19 August 2014. Balfour refused to allow an extension of time for negotiations which could have prompted a fourth bid. Carillion subsequently announced the same day it would no longer pursue a merger with its rival.[13]
In December 2014, Carillion acquired a 60% stake in Rokstad Power Corporation, a Canadian transmission and distribution business, for £33 million.[14] Carillion acquired 100% of the Outland Group, a specialist supplier of camps and catering at remote locations in Canada, in May 2015[15] and a majority stake in Ask Real Estate, a Manchester based developer, in January 2016.[16]

In 2009, Carillion was revealed as a subscriber to an illegal construction industry blacklisting body, The Consulting Association (TCA), though its inclusion on the list was mainly due to its previous ownership of Crown House Engineering (acquired by Laing O'Rourke in 2004), and previous use of TCA within Mowlem (acquired by Carillion in 2006). Carillion made two voluntary submissions to the House of Commons' Scottish Affairs Committee, one in September 2012,[17] and another in March 2013, relating to its involvement with TCA.[18]

In July 2014, Carillion was one of eight businesses involved in the 2014 launch of the Construction Workers Compensation Scheme,[19] though this was condemned as a "PR stunt" by the GMB union, and described by the Scottish Affairs Select Committee as "an act of bad faith".[20] As one of the contributors to the scheme, Carillion reported in August 2016 "a non recurring operating charge of £10.5 million" representing the compensation and associated costs it expected to pay.[21] In December 2017, Unite announced it had issued High Court proceedings against 12 major contractors including Carillion.[22]

On 10 July 2017, Carillion issued a trading update that referred to a £845 milion impairment charge in its construction services division.[23] Carillion's share price dropped from 192p in July to 45p by the end of August 2017, taking its market capitalisation from almost £1bn to less than £250m. As a result, the contractor was demoted from the FTSE 250 Index,[24] and five directors stepped down while the company tried to close a refinancing deal.[25] On 27 September 2017, a Middle Eastern firm was said to be considering a takeover bid.[26] Two days later, it was revealed that Carillion's losses for the six months ended 30 June 2017 totaled £1.15 billion, following a further write-down of £200 million, this time in its support services division.[27][28]

On 24 October 2017, it was reported that Carillion was preparing to sell its healthcare facilities management business to Serco[29] (the deal included 15 contracts, with annual revenues of approximately £90m, for which Serco will pay £47.7m, with Carillion losing £1bn from the value of its order book),[30] and was planning to dispose of its Canadian operations to help shore up its finances.[29] A week later, it was announced Carillion was selling its interest in developer Ask Real Estate to West Midlands developers Richardsons Developments for £14 million.[31] In December 2017, the Richardsons also acquired Carillion's interest in the Milburngate development in Durham.[32]

In a further profit warning, on 17 November 2017, Carillion said it would breach banking covenants the following month, with full year debts set to reach up to £925m. A recapitalisation plan was to be implemented in early 2018. The company's share price fell over 50% in early trading to just 18p – valuing the business at £73m.[33] Unite the Union sought urgent talks with the company, concerned about the future of around 1,000 Carillion workers plus others employed by subcontractors and agencies.[34]

On 3 January 2018, it was reported that the UK [url=https://en.wikipedia.org/wiki/Financial_Conduct_Authority]Financial Conduct Authority was to investigate the timeliness and content of Carillion announcements from December 2016 regarding its financial situation.[35] Ten days later, the BBC reported that the company had "a matter of days" to avoid collapse and that Carillion was the subject of "high-level government meetings".[36] These meetings continued throughout the weekend of 13–14 January—covering the company's £900m debts, a £580m pension deficit, and many ongoing contracts for government departments—but broke up without a rescue deal agreed, with accountancy firm EY poised to manage a potential administration process on Monday 15 January.[37]

Just before 7am on 15 January 2018, the BBC reported Carillion was to go into liquidation,[38] the company having issued a notice to the London Stock Exchange "that it had no choice but to take steps to enter into compulsory liquidation with immediate effect". The notice anticipated an application to the High Court for PricewaterhouseCoopers to be appointed as Special Managers, to act on behalf of the Official Receiver.[39] Carillion chairman Philip Green said:

Quote:This is a very sad day for Carillion, for our colleagues, suppliers and customers that we have been proud to serve over many years. ... In recent days however we have been unable to secure the funding to support our business plan and it is therefore with the deepest regret that we have arrived at this decision. We understand that HM Government will be providing the necessary funding required by the Official Receiver to maintain the public services carried on by Carillion staff, subcontractors and suppliers.[39]

The liquidation announcement had an immediate impact on other main contractors - Balfour Beatty and Galliford Try (partners on three highway projects) were now liable for additional costs totalling between £60m and £80m respectively[40] - while subcontractors were also said to be vulnerable: the Specialist Engineering Contractors Group said Carillion's failure could lead to many smaller firms going under.[41]

https://en.wikipedia.org/wiki/Carillion

[pbrower2a]

Right-wing media giant.

iHeartMedia on the ropes: Limbaugh, Hannity distributor tries to stay alive.


Laden with $20 billion in debt, talk-radio giant iHeartMedia is trying desperately to save its failing business

Quote:iHeartMedia, the struggling company that owns hundreds of radio stations and distributes the talk programs of Sean Hannity, Rush Limbaugh and Glenn Beck, took another step toward bankruptcy by formally notifying its bondholders that it would invoke a 30-day "grace period" clause to avoid paying a $106 million interest payment that was due on Thursday.

In announcing the delay, iHeart insisted that it had the cash but needed more time to complete a reorganization that it said would "proactively and comprehensively address iHeart's capital structure."

The move spooked financial analysts. S&P Global downgraded iHeart's stock to its lowest rating and warned investors that the radio giant was likely to default on its debts. Several analysts have begun speculating that iHeart will file for bankruptcy protection during the grace period.

iHeart, which was formerly known as Clear Channel Communications, suffered another setback in late December when its billboard advertising division, a separate publicly traded company, was sued for extending more than $1 billion in cut-rate loans to iHeart, which were supposed to be paid in full by Dec. 15.

Instead of paying its debt, iHeart, which owns about 90 percent of Clear Channel Outdoor's shares, forced its subsidiary to postpone the due date to May 15 of next year.

In a filing in the Delaware Court of Chancery, a Massachusetts county pension fund alleged that iHeart has been utilizing Clear Channel's steady revenue stream as the primary means of financing itself because iHeart is unable to attract investment. The lawsuit was first reported by the Courthouse News Service.

https://www.salon.com/2018/02/03/iheartm...tay-alive/

Portent of the demise of right-wing media as they now constitute themselves? Growing costs but shrinking revenue? That is a bad reality in any business. When the customers leaving the business are not being replaced by new ones, that business is doomed to failure unless it can rectify the situation by getting new customers.

I am satisfied that there will be some new conservatism among Millennial adults inn the 2030s, but not of the Limbaugh-Hannity variety that insults anyone capable of rational thought. iHeart media will probably be defunct long before then.

[pbrower2a]

A high-profiler retailer dies.




Toys R Us is preparing to close all its stores in a total liquidation, according to multiple reports, with the iconic retailer having spent the past several months attempting to find a path to survival through a Chapter 11 bankruptcy proceeding.

Bloomberg and the Wall Street Journal cited multiple unnamed sources who blamed the development on weak holiday sales that in turn ratcheted up pressure from lenders owed $5 billion. A formal announcement could come as soon as Monday, with the company still holding out hope for a midnight rescue offer.

A Toys R Us closure would have immediate ramifications for workers at the stores, which double as outlets for its Babies R Us brand — in regulatory disclosures for previous store closings nationally, Toys R Us has listed between 50 and 80 workers in each location.

But the company’s vendors who extended merchandise or credit on the promise of payment stand to lose, as well, including Lego, which has its U.S. headquarters in Enfield. Other Toys R Us and Babies R Us suppliers with local ties include Wilton-based Melissa & Doug; Compass Diversified Holdings in Westport, which owns the Ergobaby line of infant carriers; Jakks Pacific, which sells action figures under license with Stamford-based WWE; and Newell Brands, which has a corporate office in Norwalk and its umbrella of brands including Graco and Baby Jogger.

“It’s really incumbent upon (companies) like us to make sure that, as those stores come out, that we’re actively marketing to the consumer and trying to drive her to an alternative location where she can find our products in the price tier that she’s shopping in,” said Michael Polk, CEO of Newell Brands, speaking to investment analysts in mid-February. “That’s a little bit of the ‘inside baseball’ type of details that are going on in the baby business right now.”
Also exposed in any liquidation are landlords, with Toys R Us having pressed for better rent terms the past several months.

Wayne, N.J.-based Toys R Us was already in the process of closing two Connecticut stores in Newington and North Haven, while intending to push ahead with southwestern Connecticut locations in Danbury, Norwalk and Milford; as well as in Waterbury and Manchester after reversing prior plans to close the two.

https://www.thehour.com/business/article...740742.php

[beechnut79]

(01-15-2017, 02:52 AM)pbrower2a Wrote: As the Obama years come to a close I notice far fewer business failures than under Dubya -- even before the economic meltdown of 2007-2009.  The best known of American circuses closes after nearly a century and a half the revenues can no longer keep pace with costs. The demise came apparently with the great cost of keeping the one land animal that may be smarter than humans... those were the top animal stars. But that reflects a cultural trend long in the making. Kenneth Feld rescued the failing circus business

The highest-profile business failures under President Obama were the questionable vocational schools more adept at getting students to sign  notes that the federal government would guarantee the 'educational institution' which ordinarily  prepared the student for nothing. The Obama Administration cut off the loans, so students get stuck with having to go to legitimate schools  that really teach something or having to vocational schools of modest cost and promise.

Count on this: the Trump Administration want those scam schools back in business.

I expect this thread to get very busy in the next four years. Easy money for shysters is the Trump way.

Your remark concerning the questionable business schools brings back memories of an earlier scandal. In the late 1970s a Chicago newspaper did an expose called "The Dance Hustle" concerning so-called dance studios that really didn't know how to teach but sure did know how to swindle. They especially enjoyed preying on elderly widows whom they thought were very lonely. I'm sure at least some of them were, but that's beside the point. In fact I worked in a business for a widow at that time and she told me that she got said calls from one of these schools who could take anyone who didn't know a waltz from a samba and make him/her a teacher. Their main "job" was to convince the students that they needed more and more lessons and bribed them into signing up. I believe they were mostly shut down shortly afterwards.

[beechnut79]

(03-11-2018, 12:19 AM)pbrower2a Wrote: A high-profiler retailer dies.




Toys R Us is preparing to close all its stores in a total liquidation, according to multiple reports, with the iconic retailer having spent the past several months attempting to find a path to survival through a Chapter 11 bankruptcy proceeding.

Bloomberg and the Wall Street Journal cited multiple unnamed sources who blamed the development on weak holiday sales that in turn ratcheted up pressure from lenders owed $5 billion. A formal announcement could come as soon as Monday, with the company still holding out hope for a midnight rescue offer.

A Toys R Us closure would have immediate ramifications for workers at the stores, which double as outlets for its Babies R Us brand — in regulatory disclosures for previous store closings nationally, Toys R Us has listed between 50 and 80 workers in each location.

But the company’s vendors who extended merchandise or credit on the promise of payment stand to lose, as well, including Lego, which has its U.S. headquarters in Enfield. Other Toys R Us and Babies R Us suppliers with local ties include Wilton-based Melissa & Doug; Compass Diversified Holdings in Westport, which owns the Ergobaby line of infant carriers; Jakks Pacific, which sells action figures under license with Stamford-based WWE; and Newell Brands, which has a corporate office in Norwalk and its umbrella of brands including Graco and Baby Jogger.

“It’s really incumbent upon (companies) like us to make sure that, as those stores come out, that we’re actively marketing to the consumer and trying to drive her to an alternative location where she can find our products in the price tier that she’s shopping in,” said Michael Polk, CEO of Newell Brands, speaking to investment analysts in mid-February. “That’s a little bit of the ‘inside baseball’ type of details that are going on in the baby business right now.”
Also exposed in any liquidation are landlords, with Toys R Us having pressed for better rent terms the past several months.

Wayne, N.J.-based Toys R Us was already in the process of closing two Connecticut stores in Newington and North Haven, while intending to push ahead with southwestern Connecticut locations in Danbury, Norwalk and Milford; as well as in Waterbury and Manchester after reversing prior plans to close the two.

https://www.thehour.com/business/article...740742.php

There are many other retailers who at one time were household names which are now, if still operating, on life support.  These include Sears, J C Penney, Radio Shack just to name three. K-Mart, once considered to be on the cutting edge of retail, is now on the verge of extinction. In addition, we have also heard some negatives concerning the restaurant industry. However, I personally believe this is a bit premature as most seem to be surviving OK. One thing that most have now done to compensate for sagging in-store sales is turning to delivery. Rather than hiring their own drivers they are partnering with one or more of the big three third-party delivery services: GrubHub, DoorDash and Uber Eats.

[pbrower2a]

(03-11-2018, 01:12 PM)beechnut79 Wrote:

(01-15-2017, 02:52 AM)pbrower2a Wrote: As the Obama years come to a close I notice far fewer business failures than under Dubya -- even before the economic meltdown of 2007-2009.  The best known of American circuses closes after nearly a century and a half because the revenues can no longer keep pace with costs. The demise came apparently with the great cost of keeping the one land animal that may be smarter than humans... those were the top animal stars. But that reflects a cultural trend long in the making. Kenneth Feld rescued the failing circus business

The highest-profile business failures under President Obama were the questionable vocational schools more adept at getting students to sign  notes that the federal government would guarantee the 'educational institution' which ordinarily  prepared the student for nothing. The Obama Administration cut off the loans, so students get stuck with having to go to legitimate schools  that really teach something or having to vocational schools of modest cost and promise.

Count on this: the Trump Administration want those scam schools back in business.

I expect this thread to get very busy in the next four years. Easy money for shysters is the Trump way.

Your remark concerning the questionable business schools brings back memories of an earlier scandal. In the late 1970s a Chicago newspaper did an expose called "The Dance Hustle" concerning so-called dance studios that really didn't know how to teach but sure did know how to swindle. They especially enjoyed preying on elderly widows whom they thought were very lonely. I'm sure at least some of them were, but that's beside the point. In fact I worked in a business for a widow at that time and she told me that she got said calls from one of these schools who could take anyone who didn't know a waltz from a samba and make him/her a teacher. Their main "job" was to convince the students that they needed more and more lessons and bribed them into signing up. I believe they were mostly shut down shortly afterwards.

Basically, such schools as Harvard University, the Julliard School of Music, and MIT need spend little money on marketing. The youth suited to them know about them. Scam schools like the Corinthian 'Colleges' advertised heavily on bad daytime TV whose viewership is typically people completely unsuited to post-secondary schooling of any kind), and for them marketing is a huge expense. The people who watch talk shows in which chairs might fly or someone might be exposed with "You are the father!" are, so far as I can tell, either unemployed or do shift work on jobs that they hate. They are stupid enough to believe that a good education for any purpose (even learning a trade) takes a little time and even less effort. A real college and even a real trade school are not easy propositions.

The dance-school hustle was somewhat different in that it told people that by being good dancers they could expand their social lives. That is a different motivation, but where greed meets a little cleverness, any scam is possible. Lonely? There is volunteer work; there are religious bodies; there are fraternal organizations; and there are community colleges (where one might at least learn a hobby, but that takes some effort and is worth the effort).

[pbrower2a]

(03-11-2018, 01:20 PM)beechnut79 Wrote: There are many other retailers who at one time were household names which are now, if still operating, on life support.  These include Sears, J C Penney, Radio Shack just to name three. K-Mart, once considered to be on the cutting edge of retail, is now on the verge of extinction. In addition, we have also heard some negatives concerning the restaurant industry. However, I personally believe this is a bit premature as most seem to be surviving OK. One thing that most have now done to compensate for sagging in-store sales is turning to delivery. Rather than hiring their own drivers they are partnering with one or more of the big three third-party delivery services: GrubHub, DoorDash and Uber Eats.

Restaurants have the peril of getting caught in a fad and being unable to escape the fad once it fades. Turnover in mom-and-pop restaurants has always been high. Gimmicks have a tendency to get stale fast.

Fast-food places are basically conveniences. So you couldn't cook a hamburger patty as cheaply as  "Chez Mac"? No surprise. "Chez Mac" is really efficient in its use of labor, food, and materials. On the other side, the real top end has well-heeled customers who buy high-end foods and drink with inflated mark-ups. Those will not get hurt. I would guess that the middle market is most vulnerable, especially those places that sell overpriced, mediocre food. I will not name names. As with such once high-profile retailers as Montgomery-Ward, Mervyn's, Tower Records, Circuit City, Blockbuster Video, Borders, and Woolworth's so it was with Howard Johnson's, Steak and Ale, Chi-Chi's, and Bennigan's. Or airlines like TWA, Pan-Am, Eastern Airlines, and Braniff. these companies over-expanded in the expectation that greater volume of sales would solve their internal faults (the inner faults grew as quickly as the revenue), the companies made poor choices in locations, or failed to adapt to changing demographics and consumer tastes. Betting that a high-profit activity such as consumer electronics would remain such ignored that a company like Wal-Mart could get in and cut profit margins for companies that got complacent about costs of doing business.

People are finding that they can get microwave-suited entrees at the nearby grocery store cheaply, cook them quickly, and have them when they feel the urge. They can get all sorts of choices, including allegedly exotic fare. No lines, no tips, and plenty of choices.

[Warren Dew]

(02-04-2018, 02:52 PM)pbrower2a Wrote: I am satisfied that there will be some new conservatism among Millennial adults inn the 2030s, but not of the Limbaugh-Hannity variety that insults anyone capable of rational thought. iHeart media will probably be defunct long before then.

Right wing talk radio will be replaced by white nationalist Youtube channels - possibly by then on some other platform than Youtube - like these:

https://www.youtube.com/channel/UCla6APL...eNLc8PYuvg
https://www.youtube.com/channel/UCpbyOgU...vVUAT2OyHw
https://www.youtube.com/channel/UCesrUK_...f7cnjQPdgQ

And yes, it will all be attractive females, because video.

[pbrower2a]

White nationalist rhetoric will be the political equivalent of pornography -- but without the sexual appeal.

[pbrower2a]

Cambridge Analytica is winding down, more for legal reasons than due to any economic failure.

Watch for a new organization with similar personnel, financial backers, ideology, clientele, and MO. The numbers racket or bookmaking outfit can always reorganize quickly as it has to close due to 'the heat'.

[David Horn]

(05-02-2018, 08:11 PM)pbrower2a Wrote: Cambridge Analytica is winding down, more for legal reasons than due to any economic failure.

Watch for a new organization with similar personnel, financial backers, ideology, clientele, and MO. The numbers racket or bookmaking outfit can always reorganize quickly as it has to close due to 'the heat'.

According to the guy who blew the whistle on CA, the Mercers and others are already fully engaged.  They created a shell before they folded CA, and the misappropriated data?  No one knows ... so far.  The Brits are on this big time.

[pbrower2a]

Another department-store chain dies. Bon Ton, owner of Younker's, Elder-Beerman, and Carson-Pirie Scott is in liquidation mode.

The Bon-Ton is a soon-to-be-defunct department store chain headquartered in York, Pennsylvania, and Milwaukee, Wisconsin. There are 267 stores, which includes 9 furniture galleries and 4 clearance centers, in 26 states.[5] Other brands operated by The Bon-Ton were Bergner's, Boston Store, Carson's, Elder-Beerman, Herberger's, and Younkers.

Bon-Ton announced on April 17, 2018 that after 120 years of service, they will be closing doors and begin liquidating all 267 stores after two liquidators, Great American Group and Tiger Capital Group, won an auction for the company. The bid was estimated to be worth $775.5 million. According to national retail reporter Mitch Nolen, stores will close within 10 to 12 weeks, during which a liquidation sale is administered.[6][7]

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During Q1, 2018, The Bon-Ton announced they would be closing 42 stores in 14 states, in addition to five stores previously announced.[14] This is in part due to the increase of their online shopping business. However, it wasn't enough to save the company from its huge pile of debt. They were delisted from Nasdaq in late 2017.[15]
In February 2018, The Bon-Ton Stores Inc filed for Chapter 11 bankruptcy protection. The company had not made an annual profit since 2010.[16]

On April 9, 2018, it was announced that Washington Prime Group and Namdar Realty Group would set a bid to save Bon-Ton from bankruptcy. On April 17, 2018, however, the plans fell through due to the court ruling the company would not be able to pay a $500,000 "work fee".[17]

On April 17, 2018, Bon-Ton announced it would liquidate all 260 stores after The Great American Group LLC and Tiger Capitol Group LLC bid $775.5 million for the retailer. They will acquire the inventory and other assets of the company and sell it all off.[18]

https://en.wikipedia.org/wiki/The_Bon-Ton

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From Wikipedia:

The main factor cited in the closing of retail stores in the retail apocalypse is the shift in consumer habits towards online commerce.[23] Holiday sales for e-commerce were reported as increasing by 11% for 2016 compared with 2015 by Adobe Digital Insights, with Slice Intelligence reporting an even more generous 20% increase. Comparatively, brick-and-mortar stores saw an overall increase of only 1.6%, with physical department stores experiencing a 4.8% decline.[24] Another factor is an over-supply of malls,[25] as the growth rate of malls between 1970 and 2015 was over twice the growth rate of the population. In 2004, Malcolm Gladwell wrote that investment in malls was artificially accelerated when the U.S. Congress introduced accelerated depreciation into the tax code in 1954.[26] Despite the construction of new malls, mall visits declined by 50% between 2010-2013 with further declines reported in each successive year.[27] A third major reported factor is the "restaurant renaissance," a shift in consumer spending habits for their disposable cash from material purchases such as clothing towards dining out and travel.[6] Another cited factor is the "death of the American middle class," resulting in large-scale closures of retailers such as Macy's and Sears, which traditionally relied on spending from this market segment.[28] The final factor in poor brick-and-mortar sales performance is a combination of poor retail management coupled with an overcritical eye towards quarterly dividends: a lack of accurate inventory control creates both underperforming and out-of-stock merchandise, causing a poor shopping experience for customers in order to optimize short-term balance sheets,[29] the latter of which also influences the desire to understaff retail stores in order to keep claimed profits high.[30]

https://en.wikipedia.org/wiki/Retail_apocalypse

But -- successful retailers in this environment include

1. Low-end stores such as Dollar General, Dollar Tree, Five Below, and Ross

2. Discount food chains (Aldi's)

3. Big-box retailers (Wal*Mart, Target, Costco)

4. Specialty retailers that deal in consumer goods best described as needs (eyeglasses), high turnover (sporting goods), or potential experience (creative supplies)

5. Fads (organic foods) that could be long-term trends.

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It's the end of the line for Blockbuster Video.

For One Last Night, Make It a Blockbuster Night

Everything is 10 years behind in Alaska—including the way people see movies. In three stores across the coldest state in the union, Blockbuster captured the imagination of its residents long after the company ceased operations around the rest of the country. But now, the late fees are finally coming due, and the end of the Blockbuster era is upon us.

He was the manager at Blockbuster and looked forward to coming to work. He loved his job, in all of its obsolescence. The silver name tag fastened to the breast of his long-sleeve dress shirt, the blue-and-yellow sign in the shape of a giant movie ticket towering above the road. The faded white paint on the windows, BLOCKBUSTER T-SHIRTS AND MORE; the three overnight drop slots, one just inside the door, arrows pointing to the rectangular hole where a small white pillow muffled the plastic thump of the movies. The stains on the store’s peeling facade and the movie posters taped on the inside glass, Jumanji and the Maze Runner sequel being the latest, and the last. The COMING SOON marquee affixed to the board on the wall behind the desk, Black Panther on 5/15, a film the entire town was buzzing about, a new release that would never arrive. And everything else that would either be sold or thrown in the trash: the monogrammed Blockbuster rug; the B-horror movies and Disney movies and TV series that weren’t available on Netflix; the striped corporate counters that smelled like cleaning spray; the giant plush polar bear atop the Coca-Cola cooler; and even the long, blue awning outside that he had no idea what anyone would do with, the awning that had been as ubiquitous to the world as the sunlight was to the summertime in Soldotna, Alaska.

He lived in the country with the wild green river, with the Moose Crossing signs on the roads, where he’d spent much of his life, where he’d rented DVDs to customers for 10 years. He could barely remember a life without Blockbuster. Without laminated cards and late fees and being kind to rewind when he was a kid. Then growing up to be on the other side of the counter at one of the last stores in the world, raising his own three children by letting them hang out there and work on homework and help put movies away in the evening hours after he picked them up from school.

It was the beginning of the summer, the beginning of the tourist season, the salmon season. The land had thawed and turned green. He was 37, living with his parents, at the moment avoiding the reality of what he would have to do next. Justin Trickel unlocked the door before noon on May 13 and began Sunday with the burden of information that he was asked not to broadcast, something that customers would eventually find out in a Facebook post on the Blockbuster Alaska page later that night — that without ceremony, the store was closing for rental business after 23 years. A message from his boss the general manager — “Justin and his crew have done a phenomenal job and will be greatly missed” — thanked everyone on the Kenai peninsula for their years of support, and turned into an online cenotaph of crying emoji and those little floating hearts broken in two: “NO!!! This sucks. … My grandma goes here weekly. … Technology has taken over everything. … the internet is wayyyy to [sic] expensive. … I hate the rental places in IGA and the other store the DVDs are always scratched up! … This is absolutely heart breaking. … This was my favorite thing to do. …”

https://www.theringer.com/movies/2018/7/...-anchorage

One store left, in the great metropolitan area known as Bend, Oregon.

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If your business is spamming and computer fraud, be careful about where you vacation.

Quote:Spain on Friday turned over notorious Russian computer hacker Peter Yuryevich Levashov to FBI cyber detectives in New Haven, who have accused him of developing the Kelihos network of hundreds of thousands of infected computers and using it to stuff inboxes with spam, steal secret financial data and spew malicious programming around the world.

The Justice Department calls Levashov, who also is known on the Internet as Peter Severa and Peter of the North, “one of the world’s most notorious criminal spammers.” Russian media has tied him to efforts to influence U.S. elections, but there has been no confirmation of that, and he is not charged with election meddling in the terse federal indictment returned against him in Connecticut in April.

Levashov, 36, was arrested by Spanish authorities in April while vacationing with his family in Barcelona. Spanish authorities put him on a plane to the U.S. and turned him over to the FBI Friday morning. He landed in New York Friday afternoon.

The indictment and arrest are the result of intense efforts by FBI cyber crime squads in New Haven and Anchorage, Alaska. Federal authorities in Alaska shut down Levashov’s Kelihos botnet and are pursing him civilly. The U.S. Attorney’s office in New Haven, which recently created a multi-agency computer crime task force, is bringing the criminal prosecution.

from the Hartford Courant

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Probably unrelated except for the method of crime. Cyber-crime is big business.

How do you say kaputt in Ukrainian?

Quote:SEATTLE — Federal officials say three Ukrainians involved in a prolific cybercrime organization have been arrested. They are linked to hacking more than 100 companies in the U.S. and around the world, which caused losses in the tens of millions of dollars.

U.S. Attorney Annette Hayes said at a news conference Wednesday that one man was arrested in Seattle and the other two were taken into custody in Poland and Spain. Their federal indictments were unsealed Wednesday.

The indictments name the defendants as Fedir Hladyr, Dmytro Fedorov and Andrii Kolpakov.

Hayes says the group, called FIN7, used malware tools to reach into more than 3,600 businesses across the country that resulted in the loss of over 15 million credit and debit cards.

Hayes says some of the companies affected included hotels bearing the name of President Trump, Saks Fifth Avenue, Lord & Taylor, Whole Foods, Chipotle, Arby's, Red Robin and Jason's Deli.

FBI Special Agent Jay Tabb says the case was one of the largest it has handled, in terms of loss, number of victims and the size of the criminal organization.  

https://www.cbsnews.com/news/fin7-intern...018-08-01/