retail news in context, analysis with attitude

…with brief, occasional, italicized and sometimes gratuitous commentary…

•  MarketWatch reports that "Nordstrom Inc. can withstand a year of store closures, according to Cowen analysts, who think other department-store retailers, including Macy’s Inc., have far less time should stores remain shuttered … Updating its previous forecast, Cowen analysts said Macy’s has about four months, Kohl’s Corp. has six months and J.C. Penney Co. Inc. about seven months."

Part of the problem that these department stores face is that they need working capital to buy product to sell later this year, and that access to capital is severely constricted by the pandemic.  Which leaves them facing the possibility that even if things do turn around, they won't have enough merchandise to capitalize on it … if indeed they are able to make it to the end of the year.

The story notes that "Nordstrom announced last week that it would offer $600 million in 8.75% senior secured notes that mature in 2025, bolstering the company’s coffers."

The question for company's like JC Penney and Macy's is how long they would have had to survive if there had not been a pandemic.  I think it is fair to suggest that while the pandemic certainly has been devastating and a shock to the economic system, it also has spotlighted and accelerated the problems that a lot of companies already had.

•  Reuters reports that "Neiman Marcus Group is preparing to seek bankruptcy protection as soon as this week, becoming the first major U.S. department store operator to succumb to the economic fallout from the coronavirus outbreak, people familiar with the matter said."

The company is said to have been left "with few options after the pandemic forced it to temporarily shut all 43 of its Neiman Marcus locations, roughly two dozen Last Call stores and its two Bergdorf Goodman stores in New York.

"Neiman Marcus is in the final stages of negotiating a loan with its creditors totaling hundreds of millions of dollars, which would sustain some of its operations during bankruptcy proceedings, according to the sources. It has also furloughed many of its roughly 14,000 employees."

Same comment as above.  Neiman Marcus's problems may be heightened, but they also are foundational … it simply may not be the definition of a 21st century retailer.

•  Land O’Lakes has announced that it is changing its packaging so that it no longer feature the picture of a Native American woman with a feather in her hair, and will phase in a new design "ahead of its 100th anniversary," the New York Times writes.  "Instead of the depiction of the woman, some products will be labeled 'Farmer-Owned' and feature an illustration of a field and lake, or photographs of its farmers, the company announced."

The new design. which will be fully rolled out by the end of the year, was applauded by the Native American community, where activists called it an "antiquated symbol" not reflective of their culture.

CEO Beth Ford said in a statement that it recognized the need for “packaging that reflects the foundation and heart of our company culture.”

There will be some who decry this as politically correct pandering.  But it sounds to me like Land O' Lakes just wants its brand imagery to keep in synch with its reality … which makes a lot of sense.  And if that disposes of outdated images that some find offensive, that's a bonus.