SLOW DEATH: Sears inks $200 million credit line from CEO Eddie Lampert’s hedge fund

Sears, the company that refuses to die has secured a $200 million dollar lifeline according to this CNBC report.

Sears Holdings has landed a fresh line of credit, valued at $200 million, from its CEO Eddie Lampert’s hedge fund, according to a Monday filing with the Securities and Exchange Commission.

On July 13, Lampert’s ESL Partners entered into a short-term line of credit loans, which carry a maturity date of 151 days and a fixed interest rate of 9.75 percent per year, Sears said.

“This facility is intended to provide the Company with the flexibility to generate additional liquidity on an as-needed basis,” Sears CFO Rob Riecker said in a statement.

“This adjustment to our capital structure demonstrates that Sears Holdings will continue to take actions to generate liquidity and manage our business while meeting all of our financial obligations.”

Sears’ stock surged 9 percent higher Monday morning following this news. Shares are now up more than 32 percent from one month ago. This, compared with a loss of nearly 40 percent over the past 12 months.

In 2017, Sears has been trimming its real-estate portfolio — shuttering unprofitable stores — and making moves, such as opening smaller locations that only sell mattresses and appliances, to stay afloat.

Dwindling foot traffic across American malls is dragging many department stores down with it.

Earlier this year, media shy CEO Lampert sat down for an interview with the Chicago Tribune in which he said the retailer is “fighting like hell” to battle negative headlines and pessimism regarding Sears’ ability to continue.

Average FICO score hits an all-time high

When it comes to credit, Americans are faring better than ever.

For the first time, the average national credit score has reached 700, according to FICO, developer of one of the most commonly used scores by lenders. FICO scores range from 300 to 850.

Your credit score plays a big role in daily life. It can determine the interest rate a consumer is going to pay for credit cards, car loans and mortgages — or whether they will get a loan at all.

Average credit scores most recently bottomed out at 686, during the housing crisis when there was a sharp increase in foreclosures. They have steadily ticked higher since then, according to Ethan Dornhelm, vice president for scores and analytics at FICO. Now scores are at an all-time high.

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Sears to close 43 more stores

Sears is closing another 43 struggling stores.

Sears Holdings — the parent company of Sears and Kmart — announced on Friday that it will shutter eight of its namesake Sears department stores and 35 Kmart locations, adding to the list of 236 stores Sears has announced plans to shut down in 2017.

With the newest round of closings, Sears Holdings is poised to close down about 20% of its locations.

The company said in a blog post that the store closures are part of an ongoing effort to “focus on our best stores and return to profitability.”

“This is part of a strategy both to address losses from unprofitable stores and to reduce the square footage of other stores because many of them are simply too big for our current needs,” Chief Executive Officer Eddie Lampert said in the post.

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As Amazon sales soar and retail bankruptcies rise, industry execs remain ‘bullish’

While the retail industry has largely shifted to online in recent years, Tom McGee, CEO of the International Council of Shopping Centers, believes there is room for different kinds of product consumption.

“I think in a couple years we’ll stop talking about online vs. physical and we’ll talk about retail and retail will be you know multiple channels but they’ll really operate in a really synergistic way,” McGee said during an appearance on the FOX Business Network Monday.

At the forefront of the industry is Amazon (AMZN), which is launching its third annual Prime Day from 9 p.m. Monday to 3 a.m. Wednesday – a 25% longer window than it was last year.

Despite Amazon’s success, McGee says it does not completely dictate the industry’s future.

“Amazon has had incredible success but you know Amazon’s an $80 billion retailer in North America…$80 billion compared to almost $5 trillion of retail sales, I mean there’s a huge amount of sales that happen in this country that don’t happen because of Amazon but Amazon is clearly influencing the industry and driving it to change.”

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Here’s How Far Sears Holdings Has Fallen in 5 Years

When Sears Holdings (NASDAQ:SHLD) reported its first-quarter 2012 results, it saw a drop in overall sales, a decline in same-store sales, and negative earnings. The company reported that revenue decreased $270 million to $9.3 billion while same-store sales declined by 1.3% — 1% at Sears and 1.6% at the company’s Kmart locations. The company lost $0.31 per share from continuing operations, but offset that by selling $233 million in assets, producing $189 million in profits.

Selling off assets to make up for sales and revenue shortfalls would become standard operating procedure for the chain over the next five years, but in 2012, then-CEO Lou D’Ambrosio probably had no idea that the worst was yet to come. In fact, in the Q1 2012 earnings release he made comments that sound a lot like what current CEO Eddie Lampert says about each quarter now.

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True Religion Files For Bankruptcy As Amazon Claims Another

More bad news for retail. According tot his Zero Hedge report over priced jean maker True Religion has filed for bankruptcy.

Nearly one year after rumors about its upcoming bankruptcy first emerged, overnight US-based denim retailer True Religion Apparel finally threw in the towel when it filed for bankruptcy protection, signing a pre-packaged restructuring agreement with most of its lenders.

True Religion, a company whose denims Reuters says have “gradually fallen out of style”, filed for Chapter 11 creditor protection in the U.S. bankruptcy court in the District of Delaware (case Case 17-11463), and listed assets and liabilities in the range of $100 million to $500 million (see full filing below). According to the prepack agreement agreed upon by lenders, including TowerBrook Capital Partners, will slash the company’s debt by over $350 million. The jean vendor also said it has secured DIP financing from Citizens Bank for up to $60 million.

True Religion Brand Jeans is pleased to announce it has secured critical stakeholder support for a comprehensive financial recapitalization of the Company’s capital structure. In signing a Restructuring Support Agreement (“RSA”) with the substantial majority of its Term Loan Lenders and its Sponsor, TowerBrook Capital Partners, the Company will reduce its debt by over $350 million and convert it into the substantial majority of the reorganized Company’s equity. To implement the terms of the pre-arranged restructuring expeditiously, the Company filed a voluntary Chapter 11 petition in the United States Bankruptcy Court for the District of Delaware, and expects it will take 90 to 120 days to obtain confirmation of its pre-arranged plan by the Bankruptcy Court. Throughout the implementation of this process, True Religion will continue to operate its business without interruption to customers, employees and business partners.

“After a careful review, we are taking an important step to reduce our debt, reinvigorate True Religion’s iconic brand and position the company for future growth and success,” True Religion Chief Executive John Ermatinger said in a statement. True Religion also said that critical trade creditors are expected to be paid in full and the company would continue to operate business as usual. The restructuring plan provides for full payment of claims of True Religion’s continuing trade creditors, which includes continuing vendors, suppliers and landlords.

The company listed Wachtell Lipton and Pachulski Stang as legal advisors, while financial advisor is MAEVA Group.

For those seeking a culprit for the latest bricks-and-mortar bankruptcy, look no further than Amazon. The denim retailer’s financial struggles are due in part to consumer tastes shifting toward online shopping and away from the brick-and-mortar shops and department stores where the company’s jeans have been primarily sold.

True Religion said the pre-arranged plan could take about 90 to 120 days to receive confirmation from the bankruptcy court.

Last October, Reuters reported in October that the retailer had hired a legal adviser to explore several debt restructuring options, as such today’s filing should come as no surprise.

Finally, with the True Religion bankruptcy filing, here is the full revised Moody‘s list of which deeply distressed retailer will likely file for bankruptcy next.

  • True Religion Apparel – men’s and women’s clothing
  • Boardriders SA  – sporting subsidiary of Quiksilver
  • The Bon-Ton Stores – parent of department store chain
  • Fairway Group Holdings – food retailer
  • Tops Holding II – supermarket operator
  • 99 Cents Only Stores – discount retailer
  • TOMS Shoes – footwear company
  • David’s Bridal – wedding dresses and formalwear seller
  • Evergreen AcqCo 1 LP – parent of thrift chain Savers
  • Charming Charlie – women’s jewelry and accessories
  • Vince LLC – clothing retailer
  • Calceus Acquisition – owner of Cole Haan footwear firm
  • Charlotte Russe – women’s clothing
  • Neiman Marcus Group – luxury department store
  • Sears Holdings – owner of Sears and Kmart.
  • Indra Holdings – holding company owner of Totes Isotoner
  • Velocity Pooling Vehicle – does business as MAG, Motorsport Aftermarket Group
  • Chinos Intermediate Holdings – parent of J. Crew Group
  • Everest Holdings – manages Eddie Bauer brand
  • Nine West Holdings – clothing, shoes and accessories
  • Claire’s Stores – accessories and jewelry
  • Gymboree – children’s apparel

Is Uber Killing the Limo Rental Industry?

The all popular app has created a kind of chaos in the transportation industry. All of the sudden just anyone could offer driving services at lower prices that registered and professional organizations and individuals ever could. This left a big mark on the transport industry as a whole, as reported by The Washington Post.

The number and the stringency of regulation which are in place for regular limo services cannot be compared to next-to-nothing regulation Uber is subjected to. This is why limo companies need to be smart, to adapt in order to survive this difficult time. Here are some useful tips which could ensure that your limo business stays afloat and competitive.

Diversify

Limo companies which only have cars and limos have been hit the hardest by the rise of Uber. Some others, like Presidential Limo DC, have a diverse fleet of cars, transporter vans and buses. This helped protect these companies from the worst of the impact. Most limo companies have had to adapt since and diversify into new markets and find new sources of revenue. Creating or using the niche markets such as dedicated wine or beer tours or shuttle services is a good way to power through the turbulent period.

Create a Mobile App

Limo companies are facing a mobile app, so the outdated phone or website-based approach is no longer enough. People live fast and use their smartphones for just about everything. If they are planning to go somewhere, they are much more likely to pick up their phone and tap an app a few times, rather than googling a website of a limo rental company, visiting the website and then finally ordering a car. Simplicity and speed are the key advantages of dedicated apps, and it is the advantage Uber has had from the start. Some limo companies are investing money into their own apps in a bid to increase visibility and revenue.

Play your strengths

Limo rental services should to their best to emphasize the advantages of renting a limo over hiring an Uber. For a start, traveling in a limo brings a certain level of class and luxury which Uber cannot hope to match. Most vehicles in the fleets of limo rental agencies are equipped with a full bar, entertainments systems and other amenities. Even the cumbersome regulations imposed by the federal government may serve as an excellent marketing point. These vehicles must be safe, whereas with Uber you can never know how roadworthy the car is. The same applies to the drivers. Professional drivers go through rigorous training and testing, something Uber drivers are not obligated to do.

Make cancellation simpler

With most traditional limo services, cancellation is notoriously difficult and it requires notification hours in advance. Uber, on the other hand, offers instant cancellation, quickly and effortlessly. This is just another example of how Uber is in tune with the new lifestyle of people. When you are constantly on the move, your plans can change quite rapidly. You do not want to be anchored down by the obligation to know hours in advance when and where you will go. Some limo rental companies have gotten the message and have significantly shortened the obligatory cancellation time to under an hour, which makes it much more accessible.

The rise of Uber is nothing more than an example of how capitalism works. A revolutionary new technology has appeared, and everyone else needs to adapt or ultimately fail. Fortunately, limo companies are resilient and their management and owners have stepped up to the challenge and they have begun to incorporate some of Uber’s strategies into their business models, ensuring the continued survival of limo rental industry.

Reach out to Presidential Limo DC at:
2100 M St. NW # 170-193 Washington DC 20037
703-347-6900

The running list of 2017 retail apocalypse victims

It’s no secret the retail industry is undergoing a transformational period that has many scaling back physical operations, shuttering stores, reorganizing mounting debt loads and in some cases ending up in bankruptcy court.

Distressed bond issuers in the U.S. retail and apparel markets are nearing recession levels, tripling in the past six years, according to a report released by Moody’s Investors Service. The report found 13.5% of Moody’s retail and apparel portfolio is distressed, compared to 16% during the Great Recession. Debt maturities are also headed toward record levels over the next five years and retailers are filing for bankruptcy at a record rate.

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U.S. auto sales fall for fourth straight month in June

According to this Reuters report auto sales have fallen for the fourth straight month.

Major automakers on Monday reported a fourth consecutive month of lower U.S. new vehicle sales for June and came in below analyst expectations, despite hefty consumer discounts and looser loan terms, providing fresh evidence that 2017 will fall short of last year’s record year for the industry.

Automakers’ shares rose, however, as retail sales to consumers were relatively stable at the U.S. automakers, with General Motors Co (GM.N) asserting that the industry was set for a stronger finish to the year.

Industry consultant Autodata put the industry’s seasonally adjusted annualized rate of sales at 16.51 million units, which was the lowest rate since February 2015. It came in below Wall Street expectations of 16.6 million vehicles and 2 percent lower than the June 2016 figure.

U.S. consumers continued to shun passenger cars in favor of larger pickup trucks, SUVs and crossovers. Passenger car sales were also hurt as some automakers, including GM, have moved to reduce relatively low-margin sales to rental agencies.

The U.S. auto industry has been bracing for a downturn after hitting a record 17.55 million new vehicles sold in 2016. A glut of nearly new used vehicles poses competition for new vehicle sales and automakers have relied increasingly on consumer discounts and loosened lending terms.

Microsoft to lay off THOUSANDS in global reorganization

More bad news for Microsoft. According to this Tech Crunch report the company is ready to lay off thousands of workers.

Microsoft is poised to layoff thousands of employees worldwide in a move to reorganize its salesforce.

A source with knowledge of the planned downsizing told TechCrunch that the U.S. firm would lay off “thousands” of staff across the world. The restructuring is set to include an organizational merger that involves its enterprise customer unit and one or more of its SME-focused divisions. The changes are set to be announced this coming week, we understand.

Microsoft declined to comment.

Earlier this weekend, the Puget Sound Business Journal, Bloomberg and The Seattle Times all reported ‘major’ layoffs related to a move to increase the emphasis on cloud services within Microsoft’s sales teams worldwide. Bloomberg said the redundancies would be “some of the most significant in the sales force in years.”

The reorganization looks to be a result of a change of leadership this past year. Executives Judson Althoff and Jean-Philippe Courtois took charge of Microsoft’s sales and marketing divisions following the exit of long-serving COO Kevin Turner last summer. Althoff, for one, has been public in his criticism of previous sales approaches, and he is keen to make Azure a central part of the focus.