Lackluster holiday retail sales were enough of an impetus for industry executives to close poor performing locations and reassess the viability of expanding the online retail portals.
Citing dismal sales, Kohl’s Corporation will shutter 18 locations while the losses keep mounting for Sears Holdings Corporation attempting to liquidate assets upwards of $300 million. Electronic sales have waned at Best Buy Company and Restoration Hardware Inc. shares nosedived nearly 30%, rationalizing the low sales were a ” pullback by the high-end consumer.”
In the Sears annual shareholders letter, Sears CEO Eddie Lampert lamented that the rise of e-commerce sales in 2015 is redefining the retail sector while consumer trends and transitions are imposing themselves on retail giants Wal-Mart and Macy’s.
Poor management decisions over the years failed to reverse the course of weakening consumer demand for Sears. Losses increased $431 million to $580 million for the period concluding January 30, 2016.
Sears announced it intends to shut down at least 50 stores with the list of potential locations likely to increase. 50% of its 1253 store leases will end in less than 60 months. Though closing the doors on 18 locations, Kohl’s announced it will open seven new locations, with a floor plan of 3,000 sq. ft. Most Kohl’s store are designed with an 88,000 sq. ft. floor plan.
All large store retailers are in agreement digital sales accelerated, but they did not expect an increase, of an astounding 30%, in the fourth quarter. The startling 30% increase convinced upper management to scrutinize its brick and mortar holdings.
Not only is Kohl’s dealing with slumping sales, which saw its profit plunge 20% for the quarter ending January 30, 2016. It’s battling an increase in employee wages and dealing with an abnormally warm winter, which has left seasonal apparel on the racks. Kevin Mansell, Kohl’s CEO is implementing a strategy of downsizing inventory and lowering marketing expenditures to counter “wage pressure” that is being felt company wide.
The renowned global investment banking firm Madison Street Capital, LLC, announced the hedge fund sector M&A overview, 4th edition, is now available. Madison Street Capital indicated over 40 hedge fund transactions occurred in 2015, surpassing 2014’s transactions by 33%. 2015 transaction volume as calculated by AUM was roughly 25% more than 2014.
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