Sears believes Eddie Lampert's bid to save the company is short. May liquidate without fix.

- Sears' advisors are testing just how much Chairman Eddie Lampert wants to keep the retailer alive.

Lampert has put forward a $4.4 billion bid to save Sears and 50,000 jobs by buying it out of bankruptcy through his hedge fund ESL Investments. His offer, though, which is largely funded with outside sources of capital, is facing tough scrutiny from Sears advisors, people familiar with the situation tell CNBC. If the two are unable to find a resolution, it could force Sears to liquidate.

The 125-year-old retailer, which also owns Kmart, filed for bankruptcy in October. At the time, it employed 68,000 workers.

Sears advisors' have until 4:00 p.m. ET on Friday to decide whether ESL's bid is viable. The company and ESL met earlier this week to discuss its bid, without agreeing to a compromise.

The offer has raised a number of flags, the people said. It is short of covering the fees and vendor payment it owes, making it "administratively insolvent."

A continuing issue is the $1.8 billion that Lampert put toward his offer by forgiving debt owed to ESL through a so-called credit bid. The restructuring committee advising Sears is not confident the bankruptcy judge will allow Lampert to use a credit bid without addressing a pending investigation about Sears transactions under Lampert's ownership, the people said.

Sears' unsecured creditors have said there may be claims against Sears for those deals, which include Sears' spinoff of Lands' End LE and transactions with Seritage Growth Properties SRG , a real estate investment trust Lampert created through some Sears' properties.

ESL has stressed that all transactions it did with Sears during Lampert's tenure were approved by Sears' board.

As with all bankruptcy negotiations, it remains possible either side will make concessions to end the disagreement. The two parties therefore could come to a resolution to divert liquidation.

Burberry ends bonfire of the luxuries after waste outcry

LONDON (Reuters) - Britain’s Burberry will no longer burn unsold luxury goods to protect its brand after an admission that it destroyed almost $40 million worth of stock last year sparked a furor over waste in the fashion industry.

Burberry also said on Thursday it would no longer use real fur such as mink and racoon, in another step to improving its social and environmental credentials which was immediately welcomed by animal rights campaigners.

The waste revelation in July from Burberry came only months after the owner of Cartier and Montblanc admitted to destroying some of their unsold watches and coincides with growing public awareness of waste and its environmental impact.

“Modern luxury means being socially and environmentally responsible,” said CEO Marco Gobbetti, who is in the process of taking Burberry, where coats sell for more than 2,500 pounds ($3,234) and handbags are priced at up to 1,500 pounds, more upmarket.

Many retailers have been called out in recent years for destroying unsold stock, including by slashing or punching holes in garments before throwing them out.

Richemont, owner of luxury watch brands, said it bought back unsold stock from dealers during a recent downturn and recycled the precious metals and stones that were in the high-end pieces.

Burberry physically destroyed 28.6 million pounds worth of finished goods in the financial year to April, up from 26.9 million pounds the previous year, including 10 million pounds worth of beauty products such as perfume.

The products are generally those that did not sell via discount outlets and are more than five years old. Burberry said it would try to reuse, repair, donate or recycle its products while a strategy to make fewer, more targeted collections should help reduce excess stock.

It is also working with the sustainable luxury company Elvis & Kresse to transform 120 tonnes of leather offcuts into new products over the next five years.

Walmart wants to take on Amazon with virtual reality shopping

qz.com - Walmart, the world’s biggest company, is better known for cheap tube socks than its technical wizardry. But the company has thousands of developers plugging away in an airport-sized building at its headquarters in Bentonville, Arkansas, and has launched a tech incubator, Store No. 8, that is cooking up ways to combat rival Amazon.

One potential front in the retail battle is virtual-reality shopping. Walmart has applied for patents for intellectual property that creates a “virtual showroom,” according to Bloomberg. The technology would give home shoppers with VR headsets and gloves the ability to browse through a (presumably uncrowded and meticulously clean) virtual store, pick up merchandise, and instantly add it to a queue for home delivery.

In theory, the technology would appeal to those attracted to Walmart’s prices and want to handle merchandise before they buy, but who dread visiting its vast supercenters.

Walmart is already starting to thrive online. In 2016, the company spent $3.3 billion to acquire the e-commerce site Jet.com and its CEO Marc Lore (paywall), who was charged with revitalizing Walmart’s online sales. Walmart has also diversified its assortment of goods available online with purchases of companies like Bonobos and ModCloth E-commerce sales surged 40% from last year in the quarter ending June 30, and the company says it expects to finish the year up 40% from 2017. Industry analysts attribute the success to the overhauling of its website.

AliBaba, the giant Chinese e-commerce site, debuted VR shopping with its Buy+ in 2016, and there are hints that Amazon is exploring the concept. But any VR retail strategy will need much wider adoption of headsets and home technology to become viable.

Walmart has made other forays into virtual reality. It uses a VR set to help prepare employees for the crush of Black Friday shoppers, and in February, bought Spatialand, a small VR developer. At the time of the purchase, the company was coy about its intentions for the technology. Now we’re starting to see what Walmart has in mind. ContinueReading

How Toys R Us’ Demise Could Benefit Amazon And Other Retailers

pymnts.com - One retailer’s loss could be another retailer’s gain: Even though Toys R Us is facing bankruptcy, other retailers may benefit from the embattled toy retailer’s demise.

Amazon could take over some of Toys R Us’ stores, which may be soon vacant as the retailer winds down its operations. And while Amazon doesn’t want to keep the Toys R Us brand, it could use the space to display its own products, Bloomberg reported.

But the stores could, for example, give Alexa — and the devices it powers — a brick-and-mortar home. The voice-activated technology’s benefits are easier for consumers to see and experience in person, after all.

Beyond Alexa and the Amazon Echo, Toys R Us’ space could be of use to the eCommerce giant for, say, groceries. Think of the new stores as mini-Whole Foods delivery depots: If Amazon were to take over some of the space left vacant by Toys R Us, the company could gain space to store groceries for delivery.

In addition to groceries, Amazon has been growing its brick-and-mortar presence. For example, the retailer is reportedly gearing up to open as many as six of its Amazon Go cashless brick-and-mortar convenience stores.

But whatever Amazon has in mind for Toys R Us, talk of the company taking over its stores is still just speculation: Those plans may never come to life.

About three years ago, Amazon considered taking over a few RadioShack locations when the retailer went bankrupt. As with Toys R Us, RadioShack’s locations would have been places in which to showcase the company’s hardware.

In the end, Amazon’s plans to take over RadioShack’s locations never materialized. Had that happened, it would have been the retailer’s biggest buy-in into traditional retail at the time. ContinueReading

Walmart is abruptly closing 63 Sam's Club stores and laying off thousands of workers

businessinsider.com: Walmart is closing 63 Sam's Club stores across the US, the company told Business Insider on Thursday afternoon, after reports of abrupt store closings began to emerge.

The closings will impact about 9,400 employees, a Walmart official said.

In some cases, employees were not told their store had closed before showing up to work on Thursday. Those employees learned their store would be closing when they found the store's doors locked and a notice announcing the closing, Sam's Club workers told Business Insider. At some stores, employees were turned away by police officers.

Ten of the affected stores will be turned into e-commerce distribution centers, and employees of those stores will have the opportunity to reapply for positions at those locations, a Walmart official said.

The remaining stores will stay open for several weeks before closing permanently. All of the affected stores were scrubbed from the Sam's Club website on Thursday morning.

Sam's Club CEO John Furner notified employees of the closures in a company-wide email sent Thursday.

"After a thorough review, it became clear we had built clubs in some locations that impacted other clubs, and where population had not grown as anticipated," Furner said in the email. "We will be closing some clubs, and we notified them today. We'll convert some of them into eCommerce fulfillment centers — to better serve the growing number of members shopping with us online and continue scaling the SamsClub.com business."

Sam's Club membership fees — which cost $45 annually — will be refunded to customers affected by the closings, a Walmart official said.

ContinueReading

Related: After bonus announcement, Walmart fires thousands of co-managers, replaces them with cheaper workers

Amazon.com to Buy Target Corporation?

Actually, it Makes Some Sense.

investorplace.com: It remains to be seen if the eye-opening prediction that Amazon.com, Inc. (NASDAQ:AMZN) will acquire Target Corporation (NYSE:TGT) this year was just a savvy publicity stunt, or an actual expectation. With TGT stock jumping nearly 2% on the mere mention of the idea though, the market may well be leaning towards the latter.

It was Loup Venture co-founder Gene Munster’s, by the way (yes, the same Munster that used to handicap stocks for Piper Jaffray), that made the call. He explained within a report dissecting a total of eight predictions for 2018 “Target is the ideal offline partner for Amazon for two reasons, shared demographic and manageable but comprehensive store count.”

It’s an idea that would have been laughable just a couple of years ago. While few could argue that Amazon isn’t the king of e-commerce, moving into the brick-and-mortar world wasn’t quite Jeff Bezos’ milieu.

In light of some recent acquisitions though — not the least of which was buying grocery chain Whole Foods Market — the idea doesn’t seem far-fetched at all today. More important, to current Target shareholders, such a deal may be the last bastion of hope for a graceful exit of an increasingly-troubled trade. Munster also thinks, should a deal go through, Amazon’s offer would be on the order of 15% more than the current per-share price of TGT stock.

With that as the backdrop, there are more arguments in favor of this proposed pairing then Munster laid out.

US Holiday Sales See Largest Increase Since 2011

usnews.com - Retail holiday sales in America had their largest increase this year since 2011 — jumping 4.9 percent compared to the same time (Nov. 1 to Dec. 24) last year, according to a report from Mastercard SpendingPulse.

Online shopping, which increased 18.1 percent from last year, was a big reason for the bump. Despite the store closings throughout the year, the ease of online and last-minute shopping and the availability of fast-shipping options helped retail sales.

"Overall, this year was a big win for retail," said Sarah Quinlan, senior vice president of market insights at Mastercard. "The strong U.S. economy was a contributing factor, but we also have to recognize that retailers who tried new strategies to engage holiday shoppers were the beneficiaries of this sales increase."

Early promotions from retailers encouraged consumers to buy. The first three weeks of November saw significant jumps in sales, according to the report. Additionally, Black Friday and Super Saturday — the Saturday before Christmas — were the two biggest days of single-day spending for retail sales.

Although overall spending grew 4.9 percent, sales in different categories differed. Sales in electronics and appliances increased 7.5 percent, the strongest growth in the last 10 years. Home furniture and furnishings, as well as home improvement saw increases of 5.1 percent. Jewelry sales increased by 5.9 percent, mostly by last-minute shoppers, the report found.

Department and speciality apparel stores traditionally see most of their sales happen in-store as opposed to online, and despite their many closings, their sales saw moderate gains.

The SpendingPulse report is based on aggregate sales activity in the Mastercard payments network, along with survey based-estimates for other forms of payment, such as cash and checks, according to Mastercard. The data exclude auto sales. (ontinueReading

Google and Walmart are partnering on voice shopping in a challenge to Amazon’s Alexa

via recode.net - Alexa, how do you spell “competition”?

Google and Walmart have entered into a partnership to make hundreds of thousands of Walmart products available to purchase through the Google Home voice-controlled speaker, the tech giant’s answer to the Amazon Echo, the companies told Recode on Tuesday.

Owners of the Google Home gadget will be able to order one item at a time from Walmart completely by voice, or add multiples items to an online shopping cart for larger orders, and complete the purchase via the Google Home app later on.

Google first introduced voice shopping to Google Home earlier this year with partner retailers like Costco, Walgreens and PetSmart in a bid to offer commerce functionality like Amazon’s Alexa voice service already did.

In late September, Walmart will join those retailers in the program as well as on the Google Express shopping marketplace, which started out as a same-day delivery service in a handful of markets but has since expanded to include more traditional shipping speeds from partner retailers so that the service could cover the entire contiguous U.S.

On both sides, the partnership seems like a smart hedge in the event that shopping by voice actually takes off. For Google, Amazon has already emerged as an unlikely foe as more and more online shoppers start their product searches on Amazon instead of on the traditional search engine, where Google is used to placing lucrative ads alongside those type of search results. A study last year found that 55 percent of U.S. adults start their online shopping trips on Amazon.

And if voice commerce becomes popular and shoppers actually start searching for products by speaking to a device, Walmart is perhaps the only retailer in the U.S. that comes close to offering the breadth of Amazon’s product catalogue. (ontinueReading

Related:  Amazon Cutting Whole Foods’ Prices Cost Other Grocers $11 Billion In Value

TRIGGERED: Wal-Mart back-to-school sign hung above guns, sparking outrage

via cnbc.com - Wal-Mart is catching fire for a guns display at one of its stores, after a photo went viral on Wednesday of the sign that hung above it.

The photo shows a back-to-school banner that reads "Own the school year like a hero" situated above a glass case full of guns.

"What's seen in this photograph would never be acceptable in our stores," a Wal-Mart spokesperson told CNBC in a statement. "We regret this situation and are looking into how it could have happened."

Initial reports said the store was in Evansville, Indiana, but that has not been confirmed by Wal-Mart as of Thursday afternoon. They had started their investigation midday Wednesday, after the photo began circulating.

The customer who initially tweeted out the photo and who also spoke with The Washington Post has since taken her Twitter account private.

The woman, Leeanna May, insisted in an interview with the Post that the photo was taken in Evansville.

But Wal-Mart's latest tweets to unhappy customers tell a different story. It appears there is still some confusion regarding which store the sign was seen at.

This isn't the first time Wal-Mart has come under a viral attack for its products.

In July, Wal-Mart used a racist term to describe a wig cap sold online. Sold by a third party, the color of the hat was listed as "nigger brown."

The retailer also drew fire in 2016, prior to Sept. 11, when a store used Coca-Cola products to build two towers signifying the World Trade Center. A banner reading "We will never forget" hung above it. (ontinueReading

Related: Walmart says back-to-school gun display was a prank

View image on Twitter

Strength!: Walmart Apologizes After a Listing on Its Site Featured a Racial Slur

fortune.com - Walmart prompted controversy on Monday July 17 after a third-party product description on its website contained a racial slur.

The mega-retail chain published a description for a wig cap that listed its color as "Nigger Brown." The post sparked a reaction on Twitter.

"Umm, @Walmart we need to have a chat," the comedian Travon Free wrote.

Walmart apologized for the use of the racial slur on Monday, calling it "appalling." The retailer did not share the name of the vendor (for obvious reasons) that was selling the wig cap.

"We are very sorry and appalled that this third party seller listed their item with this description on our online marketplace," Walmart said in a statement posted on Twitter. "It is a clear violation of our policy and has been removed, and we are investigating the seller to determine how this could have happened."

Walmart eventually took the listing for the wig down from its page. Jagazi Naturals, a United Kingdom-based company listed as the wig cap seller, said that it had nothing to do with the listing.

"The real JAGAZI is a 100% black company for black people. People have often used our brand name to try and sell their products. Please be aware. Very sorry for all the distress this has caused. We are feeling the pain here as well," Jagazi said in a statement. (ontinueReading

US: QVC, HSN merging to battle Amazon

via cbsnews.com: NEW YORK - QVC (Qualiy Value Convenience)  and Home Shopping Network, two of the most well-known TV home-shopping hubs, are combining further as they look at aggressive growth by Amazon (AMZN) and consumer shopping habits shifting to internet-based retail.

Liberty Interactive (QVCA), which owns QVC and already owns 38 percent of HSN, will buy the rest of Home Shopping Network for about $2.6 billion in a stock deal.

The buyout comes months after Mindy Grossman left as CEO of HSN to take the reins of Weight Watchers. Under Grossman, HSN worked to build its ecommerce presence and transform itself into a lifestyle network. It now derives half of its revenue from ecommerce, featuring more than 50,000 products on its website along with broadcasting to more than 90 million households.

Both QVC and Home Shopping Network have been dealing with sluggish sales as Amazon dominates the online shopping.

"It has been a tough period," said Rod Little, HSN's chief financial officer and interim head, in a conference call on Thursday to discuss the deal. "We are not happy with the performance. It's part of why we are here today, I guess."

Liberty, which has owned a stake in HSN since 2009, said buying the rest of the company will boost the merged company's ecommerce capabilities, cut costs and offer marketing opportunities, among other benefits.

"The increased scale of this combination will allow us to more effectively compete, we think, in a changing and evolving retail and digital environment," Liberty CEO Greg Maffei said in the call.

QVC CEO Michael George said the combined company will generate $7.5 billion in online sales and $4.7 billion in mobile sales, ranking it behind only Amazon and Walmart (WMT) in terms of the dollar value of ecommerce transactions.

"By combining companies, we believe will be able to accelerate innovation, enhance the customer experience, increase customer value and put ourselves in an even stronger position to help shape and lead the nation generation of shopping," George, who will head the merged business, on the call.

Home Shopping Network's consumer brands include home furnishings vendor Frontgate and home decor and clothing seller Garnet Hill. QVC's properties include apparel seller Zulily and online invitation website Evite.

Liberty, based in Englewood, Colorado, will issue 53.4 million shares of QVC Series A common stock to HSN shareholders. It said Thursday that's the equivalent of paying $40.36 per share for HSN Inc. of St. Petersburg, Florida.

That would be a 29 percent premium to the stock. Shares of HSN surged $10.30, or 33 percent, to $41.60 in morning trading.

The deal is expected to close in the fourth quarter. (ontinueReading

Walgreens deal offers no lasting relief to Rite Aid

Reuters - A slimmed-down Rite Aid Corp (RAD.N) could lose much of its bargaining heft with insurers and makers of branded drugs at a time when it is trying to turn around its flagging pharmacy business, analysts said.

Rite Aid said on Thursday it would sell nearly half its U.S. stores to larger rival Walgreens Boots Alliance Inc (WBA.O) after the drugstore operators agreed to scrap a whole-sale merger.

Wall Street showed its displeasure at the new deal, pushing Rite Aid's shares down 30 percent to a near four-year low after the announcement. The stock added to its losses, falling 7 percent on Friday.

Rite Aid has been struggling with eroding profits in its pharmacy business, which sells prescription drugs, as increases in branded drug prices have slowed while reimbursement pressure for generics has intensified.

"I think Rite Aid is going to struggle to remain relevant in the pharmacy industry," said Adam Fein, president at Pembroke Consulting, which tracks the drug distribution industry.

"The pharmacy industry has become hyper competitive and it favors either large teams or nimble independents, and Rite Aid is buck in the middle and doesn't have geographic scale anywhere, except in the North East and the West Coast."

But it's not all bad news for the company.

Under the new deal, Rite Aid will gain access to Walgreen's centralized sourcing system, allowing it to procure generic drugs at low costs for 10 years and giving its pharmacy margins a much-needed boost.

Walgreens, the No. 1 drugstore chain in the country, has a sourcing contract with AmerisourceBergen Corp (ABC.N), the second-largest U.S. drug distributor, giving the alliance bargaining clout against drugmakers.

"We estimate more favorable generic procuring costs could provide 3-5 percent of saving on RAD's total generic spend," Cowen & Co analyst Charles Rhyee said in a research note. (ontinueReading

With Whole Foods, Amazon on collision course with Wal-Mart

Reuters - When Wal-Mart Stores Inc bought online retailer Jet.com for $3 billion last year, it marked a crucial moment - the world's largest brick-and-mortar retailer, after years of ceding e-commerce leadership to arch rival Amazon, intended to compete.

On Friday, Amazon.com Inc countered. With its $14 billion purchase of grocery chain Whole Foods Market Inc, the largest e-commerce company announced its intention to take on Wal-Mart in the brick-and-mortar world.

The two deals make it clear that the lines that divided traditional retail from e-commerce are disappearing and sector dominance will no longer be bound by e-commerce or brick-and-mortar, but by who is better at both.

Amazon's purchase of Whole Foods also brings disruption to the $700 billion U.S. grocery sector, a traditional area of retailing that stands on the precipice of a ferocious price war. German discounters Aldi and Lidl are battling Wal-Mart, which controls 22 percent of the U.S. grocery market, with each vowing to undercut whatever price the others offer.

The stakes are highest for Wal-Mart. Amazon's move aims at the heart of the Bentonville, Arkansas-based retail giant's business - groceries, which account for 56 percent of Wal-Mart's $486 billion in revenue for the year ending Jan. 31. With the deal, Whole Foods’ more than 460 stores become a test bed with which Amazon can learn how to compete with Wal-Mart’s 4,700 stores with a large grocery offering that are also within 10 miles (16 km) of 90 percent of the U.S. population.

Amazon is expected to lower Whole Foods' notoriously high prices, enabling it to pursue Wal-Mart's customers. The push comes as Wal-Mart is headed in the opposite direction - going after Amazon's higher-income shoppers with a recent string of acquisitions of online brands such as Moosejaw and Modcloth and on Friday, menswear e-tailer Bonobos. (ontinueReading

Amazon moves into real-world stores with $13.7 billion Whole Foods deal

Reuters - Amazon.com Inc said on Friday June 16 it would buy grocer Whole Foods Market Inc for $13.7 billion in a move that gives the online retailer a physical network of stores to distribute fresh food and other goods to millennials and wealthy consumers.

Amazon, which is known for squeezing suppliers and has been experimenting with its own outlets, will take over a natural and organic grocer pioneer brimming with 456 stores and high-end shoppers but struggling to rein in prices and integrate technology.

The deal sent shockwaves across the food distribution market and beyond. Shares of grocer Kroger Co swooned 11 percent, while Wal-Mart Stores Inc fell 5 percent, signaling fears that Amazon could cut prices and broaden Whole Foods' product mix, turning it into a much broader retailer.[]

Amazon's shares were up 3 percent at $993.40, adding more than $14 billion to its market capitalization.

"Supermarkets will now have to contend with not only competition with each other and non-traditional grocers like Wal-Mart Stores Inc and Target Corp, but with a retailer like Amazon which has the financial capacity to price aggressively," said Mickey Chadha, vice president and senior credit officer at Moody's Investors Service.

"We expect this transaction to further accelerate the consolidation within the supermarket space."

Amazon has agreed to pay $42 per share in cash for Whole Foods, a 27 percent premium on the Austin, Texas-based grocer's closing share price on Thursday. Whole Foods shares were trading just above that level on Friday, as investors saw negligible regulatory risk to the deal closing.

A person familiar with Amazon's strategy said the company believed customers wanted a combination of online and real-world buying options.

Amazon has been looking at stores that could allow traditional in-store purchase, online ordering with on-site pickup, and home delivery, using the store's warehouse as a distribution point.

Still, Amazon is playing catch-up in the grocery business. Wal-Mart Stores Inc already offers in-store pickup. Amazon announced a similar service called AmazonFresh Pickup at two locations. Amazon also has dealt with technology problems at a prototype store inside its corporate office in Seattle, called Amazon Go, where sensors and tech-savvy cameras detect what shoppers pull off the shelves and charge their Amazon accounts when they leave, people familiar with the matter said. That has delayed opening the store to the general public, they added.

And while some analysts expected Amazon to bring vast buying power to Whole Foods, Amazon's heft in the food market is far smaller than in other areas, and high demand for organic products gives farmers unusual bargaining power.

Whole Foods has posted seven straight quarterly sales declines at established stores and had overhauled its board of directors in the face of pressure from activist hedge fund Jana Partners LLC.

"I think that this takes all of the pressure off Whole Foods and gives Whole Foods the opportunity to revitalize that business and, of course, it stems the criticism from all of these activist investors," said Neil Saunders, managing director of GlobalData Retail in New York.

The deal is for $13.4 billion in cash and the remainder in debt.

The acquisition price implies a trailing 12-month price-to-earnings multiple for Whole Foods of 31 times, versus a 14.4 average for the S&P 500 Food Retail index.

Amazon and Whole Foods expect to close the deal during the second half of 2017.

The grocer will continue to operate stores under the Whole Foods Market brand and John Mackey will remain as its chief executive officer, the companies said. Whole Foods' headquarters will still be in Austin. (Source)

Wal-Mart employees can now deliver your online orders on their way home from work

cnbc.com -Walmart. com and Jet. com shoppers in three U.S. cities now have a new delivery person, and it's not employees of one of the major shipping companies like FedEx or UPS or a delivery start-up like Instacart or Deliv.

It's a Wal-Mart store employee.

"Unlike crowdsourced delivery, where the driver has to travel (often out of the way) to pick up the package, then drive the full distance to deliver it, our associates are starting at the same place as the packages," said Marc Lore, president and CEO of Walmart eCommerce U.S., in a blog post for the retailer.

It all works through a proprietary app the retailer built for this test.

The app matches online order delivery addresses with employees' driving routes home from work, built to minimize any more driving than what the employee would do anyway to get home. Delivering is completely voluntary, and the employees can choose when they want to deliver, how many packages they can take and what size.

"Once they're done working at the store for the day, they pick up the packages from the backroom, load them into their vehicle, enter the delivery addresses into the GPS on their phone and head towards home," Lore said.

Wal-Mart compensates the employees for it but declined to elaborate how it works.

The discount retailer said the test has only been in progress for a month but so far "hundreds" of deliveries have been completed in two locations in New Jersey and one in Arkansas.

So far, "the response from associates and customers has been great," Lore said.

Its locations and labor — some 4,700 U.S. stores with 1.3 million employees — are quite an asset that Lore has been working on further integrating with its digital operations. The retailer says 90 percent of the country's population live within 10 miles of a Walmart store.

While the retailer does not provide a delivery cost breakdown, it's the last leg — commonly referred to as the "last mile" — that is the most expensive when it comes to fulfilling and shipping online orders.

Consultant group McKinsey & Company estimates "the last mile" can sometimes be more than half of an item's total delivery cost.

Last month, Wal-Mart Stores said it would offer shoppers a discount for 10,000 online-only orders that are picked up by shoppers in store rather than delivered to their homes. The discount, Marc Lore said, is "meant to be equivalent to what the last-mile delivery costs are," which in most cases averages to about a 4 percent discount per item.

The store pickup option saves Wal-Mart delivery costs, which it passes on to shoppers in the form of discounts, but the new employees-as-delivery-service test does not offer shoppers a discount. Wal-Mart said the benefit is that most orders are delivered the next day. (ontinueReading

J.C. Penney’s Turnaround Is Failing and Investors Are Fleeing

Fortune.com - Wall Street has completely lost faith in J.C. Penney's (JCP, -10.02%) turnaround.

After the struggling department store chain on Friday reported a much worse than expected drop in sales for the first quarter, Penney shares, already near 40-year lows, plummeted 8% below $5 to hit a new all-time record.

Penney said on Friday that comparable sales, which include e-commerce but exclude recently closed or opened stores, fell 3.5% in the three months ended April 29, a much deeper drop than the 0.7% decline Wall Street analysts had been forecasting, according to Consensus Metrix. It was also Penney's biggest quarterly drop in years.

For a company that had been showing signs of coming back from near-death after an ill-advised attempt to be hip in 2013, reporting a fourth quarter of declines in the last five is disheartening.

So much for being the comeback kid in the department store world.

It's not that Penney has been sitting idly by. On the contrary, CEO Marvin Ellison has been moving quickly to try to keep Penney on track with moves such as bringing back appliances last year after 33 years, expanding the number of Sephora beauty shops within a Penney store, and introducing new plus-size apparel lines. What's more, giving in to reality, Penney is now finally closing 138 stores, the better to focus its resources on stores those with potential to survive the retail storm.

And that's precisely why investors are so bearish on the company. Those efforts, while apparently successful, show just damaged the rest of Penney's overall business is.

Ellison told analysts on a conference call that Penney's home section (at one point it was 21% of sales, now it's 13%) had seen sales growth. So the company is expanding its appliance area, aimed at taking advantage of Sears' ongoing implosion, and testing home services like heating, ventilation and air conditioning systems.

The retailer also touted its beauty business, lifted by its ongoing Sephora expansion as well as the remaking of its large salon business, one it says brings shoppers to stores.

But given how expensive appliances are, and how productive the beauty areas are by sales per square foot, it's fair to expect them to give a bigger kick to results. The dismal results suggest Penney's sales in apparel, its largest category, were catastrophic.

A case in point: athleisure. Executives said on a conference call with Wall Street that "the casualization of America continues" and pointed to the growth of activewear. But given that Penney launched its own line a few years ago, Xersion, and one it has featured prominently in stores, it shouldn't have seen apparel sales decimated by this trend.

To that end, Penney is upgrading its Nike (NKE, +0.17%) areas at 600 of its 1,000 stores, and adding women's gear to suddenly resurgent Adidas at 400.

Good moves, but it's worth remembering that Nike is also available at Macy's and Kohl's, both of which also sell Under Armour. (That brand gave Kohl's, struggling as mightily as Penney to keep shoppers, a shot in the arm last quarter.)

Given that Penney wants house brand items to eventually become 70% of sales, as outlined last year in a multi-year road map, it may want to rethink as its own brands are apparently not catching on.

Penney and those rooting for it can take some comfort in how abysmal results have been for its most immediate rivals, like Macy's, Kohl's, Sears and even Target.. And Penney did stick to its 2017 sales forecast, despite the weak start to the year.

But the travails of its rivals have not provided much of a boost to Penney or prevented it from entering another period of decline. (ontineReading

Gander Mountain, popular gun and hunting store, closing nationwide

CharlotteObserver.com - Gander Mountain, a popular gun and hunting store, is closing all of its stores nationwide, the retailer announced.

The company filed for bankruptcy in March, and announced it would close 32 under-performing stores, including a location in south Charlotte.

Under the current move, all 126 stores will close from the chain, including locations in Gastonia and Monroe. It wasn’t immediately clear when the stores will close.

In a statement on its website, the company said it was acquired by Camping World Holdings Inc. last week. Gander Mountain said the move means it will continue to be a part of the “specialty outdoor market,” though it’s unclear from the statement how it will continue to serve customers.


Gander Mountain has been in business for 57 years and has locations in 26 states. The company sells guns, hunting equipment, camping gear and other items for outdoor activities.

The company’s closing is yet another reminder of the current climate in retail, where companies have competed with the growth of online shopping and customers flock to juggernauts like Amazon.

At the local level, Gander Mountain joins stores like Macy’s, J.C. Penney, Kmart and Hollister to close locations in the Charlotte area.

The company said all sales are final and there will be no refunds. Gift cards are being accepted until May 18. (ontinueReading

Struggling over priced apparel retailer Bebe Stores to shut all stores

Reuters - Struggling apparel retailer Bebe Stores Inc (BEBE.O) said on Friday it would close all its stores by the end of May, barely a month after announcing it was exploring strategic alternatives following four years of losses.

The company, which had 180 stores at the end of 2016, also plans to liquidate all merchandise and fixtures within the stores, it said in a regulatory filing. (bit.ly/2obl8s3)

Shares of the company hit a 14-month low of $3.02 in morning trading.

Bloomberg reported last month that Bebe was planning to shut stores and seek a turnaround as an online brand to avoid filing for bankruptcy.

A number of apparel retailers have gone bankrupt in the last couple of years, including Aeropostale and The Limited, due to lackluster demand as they battle stiff competition from Amazon.com Inc (AMZN.O) and fast-fashion retailers such as H&M (HMb.ST) and Zara.

Bebe expects to recognize an impairment charge of about $20 million from the store closures, which will be recorded in the third and fourth quarters.

The Brisbane, California-based retailer, known for its form-fitting dresses and other apparel, did not say what its future plans were.

The company will also pay advisers B. Riley & Co and Tiger Capital Group LLC $550,000 and 15 percent of the gross proceeds from the sale of store fixtures. (ontinueReading

America is ‘over-stored’ and Payless ShoeSource is the latest victim

washingtonpost.com - Payless ShoeSource became the latest major retailer to declare financial distress when, on Tuesday, the company filed for Chapter 11 bankruptcy and announced a restructuring plan that includes the immediate closure of 400 stores in the United States and Puerto Rico.

Further closures are possible as the company works “to aggressively manage the remaining real estate lease portfolio.”

Meanwhile, Payless said in a statement it will reduce its debt load by almost half and increase its presence in the e-commerce space.

“This is a difficult, but necessary, decision driven by the continued challenges of the retail environment, which will only intensify,” Payless chief executive W. Paul Jones said in a statement. “We will build a stronger Payless for our customers, vendors and suppliers, associates, business partners and other stakeholders through this process.”

The shoe store was founded in Topeka, Kan., in 1956 during the postwar boom and eventually expanded to about 4,400 locations in more than 30 countries. The company, which focuses on “everyday and special occasion shoes … at affordable prices,” bills itself as the “largest specialty family footwear retailer in the Western Hemisphere.”

Recently, though, the footgear empire has struggled. According to Moody’s, Payless’s revenue fell 4 percent from October 2015 to October 2016.

Celebrities such as Tyra Banks, Sam Worthington and, for a time, Star Jones wore and hawked the company’s low-cost footwear, but such endorsements proved no match for market pressures that have affected many major retail giants that once seemed indomitable.

During the first three months of 2017, nine major retailers filed for Chapter 11 bankruptcy, CNBC reported, which “puts the industry on pace for the highest number of such filings since 2009, when 18 retailers resorted to that action.”

Moody’s, last month, listed 19 retailers as financially distressed, including Sears, J. Crew and Gymboree. Macy’s, J.C. Penney, RadioShack and The Limited are just a few of the companies that have announced closures this year.

“It’s been a downward spiral for traditional retailers,” Christian Magoon, CEO of Amplify ETFs, told CNN Money.

The rise of Amazon and online shopping are often cited as a cause for the troubles of brick and mortar retailers. (Amazon founder Jeffrey P. Bezos owns The Washington Post.)

“The model of online retailers is winning out,” Magoon said. “They are more competitive on pricing, they have better selection, and their convenience level is quite high.”

It doesn’t help, as Urban Outfitters CEO Richard Hayne pointed out, that compared to the housing market, the retail market is oversaturated.

“Retail square feet per capita in the United States is more than six times that of Europe or Japan. And this doesn’t count digital commerce,” Hayne said. “Our industry, not unlike the housing industry, saw too much square footage capacity added in the 1990s and early 2000s. Thousands of new doors opened and rents soared. This created a bubble, and like housing, that bubble has now burst.”

Added Hayne, “We are seeing the results: doors shuttering and rents retreating. This trend will continue for the foreseeable future and may even accelerate.” (ontinueReading

Kmart, Sears face ‘substantial doubt’ about finances as losses grow

WashingtonPost.com - After years of mounting losses, the parent company of Sears and Kmart says there is “substantial doubt” about its financial viability.

“Our historical operating results indicate substantial doubt exists related to the company’s ability to continue as a going concern,” Sears Holdings said Tuesday in its annual report.

The biggest question, the company said, is whether it can raise enough cash to stay afloat. It has $4.2 billion in debt, up from $3 billion a year ago.

Sears Holdings is the parent of Kmart and Sears, Roebuck, & Co. It was formed after the March 2005 merger between the two companies, both of which are American retail icons dating back to the late-19th century. The decline of suburban shopping malls and the rise of online retail have dealt a double-whammy to the businesses. In recent years, the parent has shuttered dozens of stores and sold off some of its brands.

Sears Holdings hasn’t turned an annual profit since 2010. Last year, it reported losses of $2.2 billion. Annual revenue, meanwhile, declined 12 percent to $22.1 billion.

Last month, the company said it was planning a “strategic transformation” by trimming $1 billion in annual costs. It also recently announced plans to close an additional 150 Kmart and Sears stores, and sold its Craftsman brand of tools and lawn equipment to Stanley Black & Decker for more than $900 million.

“We believe the actions outlined today will ensure that Sears Holdings becomes a more agile and competitive retailer with a clear path toward profitability,” Edward S. Lampert, the company’s chief executive, said in February.

But six weeks later, the company’s tune has changed.

Sears executives said they are trying to raise cash by financing debt and selling off real estate, but warned that those efforts may not be successful.

“We acknowledge that we continue to face a challenging competitive environment,” the company said. “We cannot predict, with certainty, the outcome of our actions to generate liquidity.”

The warning is another setback for Lampert. His hedge fund, ESL Investments, has provided the company with up to $1 billion in financial support. Nevertheless, Sears Holdings shares have steadily fallen over the last decade under his leadership, contributing to a decline in his net worth from more than $3 billion to just over $2 billion, according to estimates by Forbes magazine.

Shares of Sears plunged nearly 13 percent Wednesday morning after the announcement.

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