A dozen major brands, thousands of stores, after years of struggling. Work-from-home is annihilating casual and formal office attire.
By Wolf Richter for WOLF STREET.
The brick-and-mortar retailer bankruptcy plot continues to progress relentlessly. Today, it’s Brooks Brothers, the oldest men’s clothier in the US that also diversified over the decades into women’s attire, sportswear for college kids, and the like. Owned and run by Claudio Del Vecchio – often labeled “billionaire” whose dad founded Italian eyeglass maker Luxottica – Brooks Brothers filed for Chapter 11 bankruptcy in Delaware on Wednesday.
Brooks Brothers has around 500 stores globally and 200 remaining stores in North America. Unlike other American brands that have off-shored all manufacturing of clothing to cheap-labor countries decades ago, Brooks Brothers has continued to operate three plants in the US that make suits, ties, and shirts, accounting for about 7% of its sales. The rest of its merchandise is manufactured in cheap-labor countries.
Brooks Brothers, like other retailers, has been caught up in the brick-and-mortar meltdown. It has tried to get on the bandwagon, and about a quarter of revenues are from ecommerce – but that’s not helpful for its expensive-to-operate stores. In addition, it has gotten hammered by the years-long structural shift away from its costly suits to casual office attire, where it competes with everyone out there.
In November 2019 already, the company hired investment bank PJ Solomon to explore strategic alternatives, according to sources cited by fashion magazine WWD at the time. Rumors that Del Vecchio was trying to sell the company had been swirling around for a long time, which he had downplayed in 2018, saying he was “not trying to dump the company. People come to me and inquire all the time. But are we trying to sell the company? No.”
Well OK. Del Vecchio, via his Retail Brand Alliance, had acquired Books Brothers in 2001 from British retailer Marks and Spencer, which had acquired Brooks Brothers in 1988.
It hasn’t been exactly smooth sailing over the past few years, when the Pandemic and the lockdowns hit.
But even worse for Brooks Brothers, it was hit by the shift to work-from-home where “office attire” boils down to the cargo shorts that your wife told you years ago to never-ever wear in public again.
Del Vecchio told the Wall Street Journal in an interview: “Through every era, we had challenges, but we were confident we would be able to manage through them,” he said. “Retailing has been changing a lot in the last four to five years, and we were in the process of adapting to that new environment. When coronavirus came, there was really no way to sustain things.”
The company has secured a $75 million debtor-in-possession (DIP) loan from WHP Global, a person familiar with the matter told the WSJ. WHP Global already owns the apparel brands Anne Klein and Joseph Abboud. Brooks Brothers will use the court proceedings to try to find a new owner.
Del Vecchio told the WSJ that he was unsure what he would do after Brooks Brothers is sold. “For now, I want to ensure a long life for this company,” he said.
Waiting in the wings with their bankruptcy filings:
Ascena Group, which operates nearly 3,000 stores in the US under seven brands – Ann Taylor, LOFT, Lou & Grey, Lane Bryant, Cacique, Catherines, and Justice – is now said to be preparing a Chapter 11 bankruptcy filing as soon as this week and is considering closing at least 1,200 stores and selling or shutting down some brands.
It would be a prepackaged bankruptcy filing where it and its creditors have worked out an agreement that would eliminate $700 million of its $1.1 billion in debt.
The company closed most of its stores in March. In May, it began reopening stores – but traffic to those stores was way down from already low levels last year and cash flow has been “significantly reduced,” the company said in its update.
Bankruptcy fears have dogged the company for a while. Back in August 2019, with cash running low, and brick-and-mortar sales melting down, and two months after Ascena had announced that it would close all its 661 Dressbarn stores, its lenders began fearing a bankruptcy filing and started preparing for it.
These fears heightened last fall when the company failed to sell two of its brands, Catherines and Lane Bryant. The Pandemic is just closing the bankruptcy deal that had been inevitable for a while.
Tailored Brands, the holding company for men’s apparel stores, including Men’s Wearhouse, JoS. A. Bank, and K&G, disclosed in an SEC filing on June 10 that it may have to file for bankruptcy. The plot thickened on July 1, when the company disclosed in an SEC filing that Men’s Wearhouse “elected” not to make an interest payment of $6.1 million on senior notes that are due in 2022. If it doesn’t make the payment during the 30-day grace period, the non-payment will become an “event of default.”
A bankruptcy filing, it said on June 10, “could result in a complete loss of shareholder value,” though there isn’t much left to lose, with shares having been reduced to a penny stock.
In its June 10 update on how well things were going at its reopened stores and at its ecommerce site, Tailored Brands said that total revenues in the quarter ended May 2 collapsed by 60% year-over-year, with even ecommerce sales plunging 32% — when everyone else’s ecommerce sales were skyrocketing. By June 5, the company had reopened 634 stores, and average comparable sales at stores open at least an entire week were down 65% at Men’s Wearhouse, 78% at Jos. A. Bank 78%, and 40% at K&G.
With both ecommerce and brick-and-mortar sales plunging, nothing is going to keep the heavily indebted company out of bankruptcy court.
Brooks Brothers and Tailored Brands have all the issues other brick-and-mortar apparel retailers have. But in addition they share their focus on men’s clothing for the office, which has long gotten hammered by increasingly casual office-dress codes, and now – this explains in part the collapse of Men’s Wearhouse ecommerce sales – the shift to work-from-home when even casual office attire is no longer needed, and the old never-to-be-worn-in-public-again cargo shorts and tank-top found a new purpose.
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The revenge of George Zimmer:
“we’re gonna make you look your best”
Pre Packaged Bankruptcy – “I’ts the New Black!!”
Smart Companies will be lining up to get on the Bandwagon now, as they write nice packages for themselves..
They are actually at a dis advantage to companies that have “Off loaded Debt” – if they try to operate and Compete against Companies that Don’t carry that load anymore..
It would be a prepackaged bankruptcy filing where it and its creditors have worked out an agreement that would eliminate $700 million of its $1.1 billion in debt.
Woooolfy.. Isn’t this what you do… with “Debt Up the Wazoo?”
Oragami:
“The revenge of Geoge Zimmer”:
“And, I guarantee it”!!!!
If you still look sharp in George Z. threads you ain’t hurt . Fact is you can now wear a conversation piece ,if you can find anyone with speech skills to converse with.
Ha HA Ha Ha .. uh, say what Bro ??
“office attire” boils down to the cargo shorts that your wife told you years ago to never-ever wear in public again.
gotta say Wolf,,, you are apparently nearing your peak, or, possibly your peak plateau with that great description,
SO near and dear for us who have been ”working from home” (WFH ) for all too long and some of us still longing for the days when we could hang with our co workers of all aspects, tall and short, lean and otherwise, of all and every possible descriptions equally loved and hated by us old folks who love everyone who would at least try to do their best everyday
Bought a new wardrobe for this year. $208 with free shipping. Fathers Day sales. And yesterday, purchased some new runners (tennis shoes) with free delivery at a lower than store price. I didn’t need the new shoes, I just like to have a pair ready to go. But here is why I wrote this reply.
As VVet mentioned scruffy shorts, I was in my old cargo shorts today, interestingly enough at the Vets (with my pup)…that kind of vet. On the way into town wife remarked, “I’m surprised you’re wearing those shorts today instead of your jeans…..with a belt”. At the vets, after I bent down to snap the lead on, she added, “You really shouldn’t wear those shorts in public. Honestly, when you bent down all I saw was crack. You can’t wear those again”. Replied with a question, “Why are you so focused on my butt? Besides, I prefer to call it male decolletage. When you notice and comment you give yourself away”.
I guess no more old cargo shorts go to town. I’ll just use ’em for work and hitch them up as needed.
New wardrobe, 2021….shooting for under $200.
Paulo.. the question arises:
You wrote:
“At the vets, after I bent down to snap the lead on, she added, “You really shouldn’t wear those shorts in public. Honestly, when you bent down all I saw was crack. You can’t wear those again”.
Who was snapping “The Leash” on whom???
:)
Gross.
Save em for the next refrigerator repair.
‘;]
You know, who Really needs to be decked out to the nines ….. unless your one of those management class ‘playas’.. or higher??
The “Suit” is just one, or maybe twice removed from armor and fine silks .. only fit for the egotistical benefit of high court royalty ..
.. in other words – “Power Clothing”.
Paulo: on a different matter, I was reading about Canada as I would like to do some vacations there when the situation allows, and noticed that there are a number of cities with high crime rates according to some articles. Some were in your neck of the woods (Port Alberni, and even places like Campbell River and Courtenay had what seem to be elevated rates). I was surprised to see Penticton even had a high rate. As a resident of Canada, if you read my post, would you be able to shed some light. Sorry to get off topic here, was hoping to get the straight scoop. Thanks.
Since I now work from home, I am not planning on buying any clothes until 2021.
High rent and debt payments are a common theme in the retail BKs. Both are competitive disadvantages in a downturn. Be interesting to see if the COVID-depression triggers a return to less speculative financing.
If both retailer and landlord have high debts, neither has enough operating flexibility to survive a shutdown without slaughtering shareholders and haircutting bondholders.
But a retailer that owned its land and stores, as opposed to renting, could have lower fixed costs and better ability to weather a recession. McDonalds does this in restaurants; are there retailers with similar models? For mall environments, are there landlords sufficiently well capitalized to take equity stakes or variable payments, in lieu of fixed monthly rents? With potentially more upside if things go well?
Whoops, bad comment placement. Meant this not as a reply.
I think Dillards owns most of their store locations, they also have the best mens department I’ve ever seen outside of the original Barneys in NYC.
I believe that DDS owns around 4 million sq ft of space. Although the value of this space has come down considerably in the last year, it represents the one reason to be buy DDS stock
Chick-fil-A is a very interesting model. Corporate owns all the real estate and buildings. Franchisees own the operating entity, and can only own one location, where they must actually work.
They were way ahead of the curve when it came to optimizing drive-through and mobile ordering. They were tearing down stores that weren’t even 10 years old to add extra lanes. It’s a big reason they’re printing money now during covid.
Look up mcdonalds debt to equity ratio to say they own there own stores is a stretch. They “own” the property the operator owns the building. Everyone is leveraged to the max.
I would venture to suggest that it would be a mistake of the greatest seriousness to wear those nasty old cargo shorts every day while in lock-down working from home – sounds like a divorce accelerator to me.
One should make even more effort to impress the only person who truly matters to the health of one’s bank account.
A new-found talent for baking soda bread can only go so far, after all…..
I’m not even working anymore (retired) and also not buying clothes. I have enough in the closet to last the rest of my life (and one suit for weddings and funerals). Now, DW??…..that’s another matter.
The writing was on the wall when Mens Warehouse started selling tighter-than-tight-fitting suits with trousers four inches too short, and bright fuzzy multi-colored socks. Maybe there is an accounting for fashion.
Yeah, and those visible cuffs even when your arms hang down. Looks pretty uncomfortable all told.
No, that was never a good look for men.
I haven’t shopped Mens Warehouse in a long time, but if they didn’t have a big & tall department in America, they deserve to go bust. All you have to do is take a look around, everybody is big, even the guys that workout.
FWIW: I was in one a year or so ago, and they did have B&T. I was able to see a few shockingly ugly 4XL Tall polo shirts, and there was a tall kid in there buying a suit. FWIW
In the last 10 years men’s pants both formal and informal have become progressively lower at the waist, higher at the crotch and thinner at the zipper and down all the leg to cut material costs, or because their size model has changed from Western to Asian. If there is anything I hate more than the hairdresser’s it is a visit to the clothing store. I still have highly comfortable clothing from 20 years ago that has smaller size tags (!) than the unwearable versions now being sold.
The Asian sizing is a problem for western women as well. Any kind of curves and you are out of luck with most popular clothing lines.
I still have and wear, when needed, a dark grey Brooks Brothers suit with brooks brothers wing tips, the BB shirt and tie that looks good, fits great and which I first wore……50 years ago. Now retired I don’t need to wear a suit and when working had a uniform and rarely had to wear a suit. But 50 years……..and fashions have not changed from what I can tell.
Men’s work clothing is the answer. Plenty tough, lots of high quality material and pockets, sewn on brand labels can often be removed and they are loose fitting.
Carhardt is for hipsters. There are better brands.
And, they never wear out in normal dress use.
LL Bean has some nice, comfortable and properly fitting (not hipster) dress pants. They also have no-iron Oxford shirts so no dry cleaning needed.
Bobber
Like every TV newsie talking head wears these days while standing next to his female co anchor. Fosters credibility doesn’t it?
I own 3 suits from JoS Bank. Not great but they look nice and are still holding up after 4 years. I purchased 3 for a little over 1k. Maybe they were on sale because they were not the tighties. My favorite work shirts are actually Calvin Klein’s from Mens Warehouse. I also enjoy the bright socks now and then.
They are going out of business because suits are not fashionable anymore. There was a time when you did not leave your house unless you had a nice shirt and pair of slacks on.
Those days are long gone.
I am going to guess the company has been stripped of assets, highly in debt, paid special dividends to a private equity firm, massive executive bonuses…
And blaming COVID-19 for bankruptcy.
“Well OK. Del Vecchio, via his Retail Brand Alliance, had acquired Books Brothers in 2001 from British retailer Marks and Spencer, which had acquired Brooks Brothers in 1988.”
Straight from Levi’s:
“The company said most of its stores are now open and seeing sales at about 80% of where they were a year ago.”
Didn’t know that there’s such a huge pent up for jeans. Company reported a loss but beat Wall St’s expectation (no doubt they cooked up this expectation together before hand).
MonkeyBusiness,
What that phrase means is that sales DROPPED 20% from a year ago.
I understand, but 80% is still pretty big. I mean, who’s going out nowadays. 20% of the population?
People still do rough work indoors and out .. so I can see jean sales doing quite well relatively, while other kinds of ware do not. Slacks and linemen for instance, don’t seem like a good fit to me, nor does the warehouse forklift operator, or the plumber, or the electrician, or the ….
Hell, I sometime tend to my bees .. in my ‘lounge clothes’. Can’t beat that for Casual! They don’t seem to care much.
In California it’s become increasingly common over the decades to wear jeans to work and to church, with a polo or similar collared shirt. Jeans are also great for camping trips or casual wear.
Formal attire has been losing ground for a while and COVID accelerated that – but it hasn’t changed the trend against jeans.
My friend who owns a dry cleaner says it’s bad.
work from home.
no church, funeral, wedding services
very little Saturday night formal evening wear
Interesting collateral damage! I wouldn’t have thought of that, which tells me we (or I) will see similar things popping up.
Yeah. Fieftoms big and small – balloons meeting pins, popping here, popping there, commerce popping everywhere. Gotta wonder what the changes/upheavals will be for the greater society(ies), experiencing going forward, just in a decade or two ..
For many, it will be as like Dave jettisoning the Pod, but without benefit of an emergency airlock.
Well I went to drop my suits off at a local dry cleaner on Monday morning hoping to have them ready by Thursday for a big court hearing that would start Friday and the lady told me they wouldn’t be done until NEXT Tuesday.
Needless to say the hearing didn’t go the way I was hoping. I blame the JoS Bank suit.
I’m starting to wonder if Macy’s is susceptible too. I sold most of my Macy’s stock when it popped to $9 (for a nice profit), but I still own a little. It seems the need for new clothing has greatly reduced. With people working from home and limits in place on social gatherings, why would anybody buy new clothing, aside from the basics?
On the other hand, I sense the virus fear is dissipating quickly as the death rate continues to go down. The fact that new cases are rising as the death rate falls is comforting, in a way. I heard a health professional in the media pontificate that the impacts of Covid-19 are about 4x worse than the flu. That’s not enough to put peoples’ lies on hold for long. The young folks in Florida, Texas, and elsewhere are telling us this with their actions.
Meant to say “lives”, not “lies”.
It would be nice to have an editing feature.
Nah the difficult comments format is great, prevents arguments breaking out and encourages proof reading.
The more times you narrowly avert death, the more you appreciate accidental humor. “Lies” was great as is. I recommend no blue-pencil of mistakes or those alternate spellings with double meanings. What is really needed is a special section labled “Wolf’s Wierd List of wAcronymns” (as though he doesn’t have enough to do already).
Wait for the lagging indicator, Bobber. It actually takes a few weeks to die from it, usually. And not very pleasant, either. It’s a virus, not a head shot.
Very few diseases are head shots, and those that are typically kill too fast for community spread. As I tell people, COVID pushes you closer to the edge. Young people are relatively healthy, so the push doesn’t effect them much. But if you’re old, with high blood pressure and diabetes, you’ve basically got one foot over the edge…
One reason the mortality stats are lower now (in addition to increased testing of asymptomatics) is because the immune system is strongest in the summer, so of course, humans better able to keep covid at bay. Now if we continue to see these case numbers in Nov-March, uh-oh.
Buy Vitamin D lamps…
Time to get the wrinkle cream out!
Well, in the ever more insane world and market, both Nordstorm and Macy are up 5% today in the market as these retailers announce bankruptcy. What retail apocalypse?
Bobber,
“On the other hand, I sense the virus fear is dissipating quickly as the death rate continues to go down.”
Yes, the fear has been dissipating, but deaths lag “cases” by over 3 weeks, and the deaths have now started to rise:
Those new death rates are as obfuscated as the stats from the BLS!
It’s not just death.
People With Mild COVID-19 May Experience ‘Serious’ Brain Disorders: UK Neurologists
So next year, we’ll have plenty of people with brain damage.
This is really the PERFECT virus.
Conversely, people with serious brain disorders may experience mild Covid-19 (or worse)…judging by some of the party-on population.
We’ve got plenty of people with brain damage now it seems to me
It is an election year…….
In my view, that is likely hyperbole. One doctor says one of his patients has a brain issue, possibly related to COVID-19, and it becomes world news 2 hours later.
Show me the numbers. Until the numbers prove something out, it is conjecture.
Wait a minute! Was this headline derived from the pages of the Grauniad … or the more esteemed DailyMail .. ??
If from the DM, I’d believe it .. almost. ‘;]
“ People With Mild COVID-19 May Experience ‘Serious’ Brain Disorders: UK Neurologists”
I can’t help but wonder if some of our political figures already had mild cases like this. In most cases we wouldn’t really be able to tell.
Constant low level doses of RF from cellphones have damaged our herd immunity to liars and demagogues. When a real health problem comes along, we don’t recognize it. Poetic….
We’ll have to wait a week or so to see the upswing in deaths–the precursor, currently filling hospital beds indicates that deaths will follow. Half the death rate occurring in twice the population segment gets you to the same number.
Studies also show lung damage in non-symptomatic people with loss of about 10% lung function, among other effects. If you can get this multiple times, wouldn’t you think lung damage would be progressive ? If that is so, it won’t be a nothing-burger the second time around.
The range of long-term effects is apparently large, so the long-term dollar costs will be large.
Look for the CV to be the next big “preexisting condition”, especially for those who were asymptomatic but retained damage to their body.
“4x worse than the flu?”
That’s crazy talk. The average number of deaths per year from the flu is about 30,000. We’ve already passed 4x as many deaths and maybe 5% of the population is immune. We still have 10-15 times more people that will become infected (and dead) before this is over unless we find a vaccine.
It’s like watching fast motion domino fall one after another with these retailers but then there are some that I am amazed still have not gone the way of the dinosaur before CV19. Even though it’s not a national chain but Fry’s electronics come to mind..going into their stores now, you would think they filed for bankruptcy last year but yet still hanging in there, don’t understand how.
As for Luxottica, wonder if this retail tsunami will eventually hit them and force them to close some of the Lens Crafters and Sunglasses huts, especially since most of them are in dying retail malls. Not that I would be sad, seeing how they ruin once a good brand like Oakley especially after they outsourced manufacturing and laid off tons of good people at their HQ, I would say justice served if that happens.
Sunglasses are yesterday’s news. The thing to have now is a tinted face shield. Just waiting for Oakley to come out with one of those.
Google Glass smart faceshield w/ 5G
Please, no! .. don’t go there…
No more ‘shmarty’ stuff. I beg you!
Glasses is about the only thing you see on a web cam. Don’t think they are death
I went into a Fry’s in Dallas last December and shocked by the state of the store. It was as if they had already gone bankrupt and were in the process of liquidating.
Check out the one in Las Vegas. I counted three salespersons on the entire floor and five customers in the store. How can Fry’s even pay their air conditioning bill in Vegas in the summer ? Bought a nice cordless phone.
Lens Crafters, that’s a flash from the past. I switched to an online opticians service (Zenni) about 8-10 years ago. Comparable quality for a fraction of the price. For the firstvtime in my life I own multiple pairs of glasses because they’re so affordable.
Malls are doomed.
Online RayBan (Prescription) purchases are the way to go! Now, if I can only find a good, but low cost optometrist.
At the rate of descent, we’ll all be trying to grind our own frickin lenses. Most likely doing a poor job of it. But .. since the East is no longer taking our gently used recylings, there’s lots of thick-bottomed bottle glass to have at, so there’s that ..
Even brick and mortar opticians are having the glasses made in China. They examine your eyes and write the prescription. You choose a frame. This info is transmitted to a worker in a building near the airport in Beijing or Shanghai. Your new glasses are in a plastic sleeve in the belly of the next plane to the US. The slowest leg of the journey is the FedEx or UPS delivery to the retail store.
Dentures are made this way too.
Luxottica had a near monopoly in the eyeglass lens department and could afford to jack up prices of glasses because of that. But now that brands like Warby Parker and Eye Buy Direct came online, they have eaten into their monopoly big time.
Luxottica has a reputation of being a very profitable near monopoly. They will close many Sunglasses huts etc. But not because they are not profitable but because the mall they are in is death. And stores in a death mall are not profitable but that has nothing to do with the formula but the place
Tailored brands, who wears suits anymore?
I am always amazed when I view soup kitchen line photos from the great depression. People dressed up to go downtown for a free bowl of soup. Times are so different now.
Lots of lost retail jobs are being picked up by companies like Amazon but eventually the remaining unemployed will need to find work elsewhere.
To me, so much of the great depression is boiled down to what the central banks did and didn’t do and that is where the discussion stops.
Economic realities such as the roaring 20’s, the dust bowl, global crisis, tariffs, demographic cycles, bank runs, stock market crashes, wars, seem so often dismissed as if all these economic realities could have been avoided/mitigated if the Fed had just done this, that or the other thing.
The Fed can’t save Tailored brands and it can’t stop Amazon nor the brewing greatest depression.
The Fed can’t but Socialism can.
Totally agree. But the Fed PhDs are the brightest brains we have and know more than you and me in theory…..while in practice we know more of what’s happening and the likely outcome. The irony of it.
The problem has been intensified in that the rest of the free world’s central banks have followed the US’s central bank policies as if they are proven and also repeatable.
Central banks needs to be exposed for they have actually accomplished. Instead they are glorified for being the economic panacea for which they are not.
Humm, brains …
Every time I see some FedHead babbling on, all I ever hear is “Akk .. “Akkk … “ATTACKTAK!!”
… where’s Slim Whitman when you really need him …
They did not dress up. They only had two suits even if they had a job. clothing was expensive back then
The continuing growth of online shopping, the Covid19 virus, the trend towards working from home, and the riots and looting in cities and some suburbs have contributed towards an existential crisis for the retail industry.Some consultants have estimated that 250,000 retail stores will disappear in the next 5 years.This will create a large oversupply of retail space for rent and considerably lower lease prices, which in turn will cause extreme pain in the REIT mall industry and among those who hold debt related to the retail industry.
And “the worst is yet to come “.
The riots are local and thus a minor issue and there wont be an oversupply of A1 retail space because a half empty mall is not an altar to consumption and as such does not invite to shop. In fact good retail space will be in short supply but most current retail space will not be good, or even passible retail space but will be bad space and as such not valuable as retail space
We should all wear Star Trek like uniforms. Some might declare them un woke because the skirts are so short (except Scotty’s Scottish kilt) and that would only serve to embolden others to embrace it. The only question of near substance we’ll be allowed to debate is should they be made in China? The culture war will hog the headlines so no one is allowed to ask why the rich are raiding our Treasury or why our healthcare system is still broken and untouched as we get closer to a year into this healthcare related issue.
Well, Levi Strauss is laying off folks, should be a lot of unemployed Cental American seamstresses available, as that’s where Levis are made nowadays.
Levi and Gap have had factories in Lesotho for about ten years. Central America is too expensive.
The headlines are controlled by the raiders. They don’t want people to talk about treasury or healthcare
Here’s a couple predictions:
1. The Trump administration’s insistence on forcing schools K-12 to reopen is going to send the COVID pandemic into warp factor 8. The kids will absolutely 100% catch it at school and spread it to their parents and anybody else at home
2. We are still in the first wave. The virus continues to mutate, with a more infectious but not more lethal strain the current dominant strain. I had predicted that. Here’s the corollary of that prediction: There’s a really good chance that the second wave will be a mutated strain that is more infectious AND more lethal, as people continue to refuse to take precautions to avoid getting infected and the pandemic explodes. With so many infected people not taking precautions, the evolutionary advantage of having a long and mild or asymptomatic infectious period would disappear- a mutated virus that rapidly destroyed its host could spread just as quickly
I’ve been terrible at stock market predictions, but so far I’ve been batting 1.000 at my posted predictions for this COVID pandemic. Just a few reminders of other predictions I posted:
1. “Flattening the curve” and then re-opening would only re-start the pandemic. To really quash the pandemic, you need to bend the curve all the way down and bring the infection levels close to zero and then institute vigorous testing and contact tracing. That didn’t happen – most states either never flattened their curve or re-opened when new infections rates were still occurring at moderate levels
2. Vigorous testing and mass contact tracing was not ever going to happen here in the US
3. Americans were going to resist pandemic fighting measures as restrictions on their personal freedom and civil rights. This will only keep the pandemic going
Children are not as likely to spread the coronavirus.
Florida reported over 10k new cases today. Think the virus is airborne in air conditioned spaces.
These brick and mortar retail stores were doomed before the pandemic. Men’s Warehouse + Joseph A. Bank, etc. (TLRD) is down from over $50/share to below 75 cents a share.
So when is the retailer genius investors gonna buy TLRD gonna be piling in to buy the dip? Surprise it hasn’t happened yet.
DH,
You probably have never had kids, nor caught any of the colds they brought home from school.
A rite of passage that parents would know.
Children are every bit as likely to get COVID as older adults and to transmit it to others. They just haven’t been big super spreaders in this pandemic so far because the schools were so quickly shut down all over the country and have STAYED SHUT DOWN. But that’s about to change, thanks to the Super Spreader In Chief
The common cold includes a few of the other types from the corona virus class, btw
Yes, the virus is airborne and spreads most effectively in enclosed spaces, especially with people vocalizing and not wearing masks. That means bars and restaurants, parties and other indoor gatherings …. and school classrooms.
I know a guy who is a janitor in a grammar school. He constantly gets sick with whatever the kids are spreading around. Everybody in his house is constantly sick with colds and flu. The little buggers are vectors of disease.
I affectionately refer to the little ones as ‘mobile germ bags’…
We went through the rounds, when our youngin was introduced and deployed amongst other precocious little ‘bags. Passage indeed!
“sniff”
You left out riots.
I predicted back in March that we’d have riots; I was “right,” but I was wrong because I thought they’d be food riots. I think that’s what will happen during “warp factor 8.”
The BLM thing has already moved from the streets to the mainstream, dunno if you’ve noticed. NASCAR banning the Confederate battle flag, the English Premier League putting “Black Lives Matter” on the backs of EVERY PLAYER’S SHIRT (including American superstar Christian Pulisic), and starting EVERY match by having EVERY player kneel.
Jeez, seems like the EPL went overboard a bit there but seriously BLM is now mainstream worldwide
Gandalf,
As one who was born and raised in the very segregated south of USA, worked side by each with black elders and contemporaries there, in US Navy, and subsequently for many years IMO EPL did not go overboard at all.
Though black people are approx 12% by number in USA, they have received the shyte end of the stick in all the times I have been personally and professionally involved with them, basically 1950 to 2020.
YES, we have made a lot of progress in those 70 years, but NO, we are not to the place of equal opportunity and equal treatment from all levels of guv mint that we damn sure should have achieved by now IF there had been serious compliance with lawful policies and approved procedures instead of the snide, behind the back crossed fingers token compliance most places, and continuing unlawful behaviours on the part of guv mint employees and others at all levels other places.
Grandpa told me long ago that if you kick the side of a large boat or ship, you will hurt your foot, but, if you lean against the same, it will move (assuming no wind or tide pushing against you) I tried it with various boats and once a destroyer on a calm day; it worked, but ya had to keep leaning/pushing to achieve results.
Time and enough for all of WE the PEEDONs to insist on progress through consistent application of current laws, as well as insisting on new laws as needed to ensure fairness to each and every person.
BTW, having been through several lethal/severe riots, I DO NOT condone in any way unlawful rioting, looting, or any other violence as a means of achieving progress; in fact, I believe it causes just the opposite, as reactionary elements, guv mint and other, use it as an excuse for official violence, frequently against innocents.
I guess then, we will all be dead soon? Then the Fed won’t have anything left to save and they can stop the printing.
I doubled my garden size. I’ll have food for the winter…
Well no, I just think the COVID pandemic is going to get a lot worse, and it’s going to start hitting the small children if the schools are forced to reopen by the Super Spreader In Chief. America will survive, as it survived the Spanish flu
Fast forward to September-October, with the children’s hospitals filled to capacity with sick kids with COVID … who all caught the virus …. at school. Angry (and sick with COVID) parents asking why this happened….. photos of amazingly cute kids desperately ill in the Peds ICUs, night after night …. on ABC Nightline …..
Really? Just how hard is this to foresee in advance?
I guess if you’re a climate change denier and think your predecessor was born in Kenya and that Vlad Putin is more trustworthy than your genuine American national security advisors, it does all makes perfect sense
Wunderbar! They can put all the pictures in a TV ad saying “Please donate to whatever freaking cause it is this time”. The sleazy backers can the drain 99.9% of the proceeds for management fees, and we’ll all feel good that everything will work out like Spring. You gotta love America…we’re as crazy as a bunch of rats in a sh*thouse (plagiarizers too)!
In fact, I _do_ think that Putin is more trustworthy than the average American national security advisor. I’ll leave it up to you to decide whether that says something about Putin or about the trustworthiness of the security advisor in question.
And no, I do not think it all makes sense.
JO,
Yes I’m aware that a certain segment of our American political spectrum fervently believes that Vlad Putin is a devout white Christian who is joined in common cause with Americans of similar faith and skin color in fighting against the godless calamities befalling our country
Right. Alt right.
Working in an office sucked, remote work is great in part because you work while wearing your most comfortable clothes or nothing at all.
Businesses that aim at dressing people for the office will have to adjust.
Back in the 70’s and 80’s when a lot of these big malls and retail space was being built out they were still predicting jet packs, personal hover cars and robot butlers. How come they were not able to predict online shopping and its effect on the huge capital projects being constructed then for the sole purpose of in-person shopping. If we could just go back in time and put all that money in to high speed rail ( with compartments), mask factories and a modern electrical grid.
Didn’t “The Jetsons” get everything via vacuum tubes (set way back machine to 1960’s). We could construct a giant system of tributaries and name it “Amazon” River Basin.
The dollar is getting weaker and weaker. It just doesn’t make sense how it’s weakening against currencies like the Indian Rupee.
Hyperinflation soon?
I have been wondering this too. Is there data out there on the swap lines with other CB’s? Is the Fed purposefully dropping the dollar value in order to prop up stocks for a bit longer? Maybe to push out shorts? And then when the shorts have been pushed out raise the dollar back to stamp inflation and bring stocks back to reality?
I really have no idea what is going on anymore.
Well, you may have stumbled on the truth: The New York Fed runs one of the world’s largest trading desks, and to the extent that the national debt can be expanded, can break any individual investor’s bank. That means wiping out anyone who has shorted absurdly overvalued stocks like FANG, or QQQ (Wolf, did you catch that?). For that matter, your friendly stock broker, who most mysteriously has stopped charging commissions (why is that?!), and who knows what everyone’s position is, is also in a position to screw every customer with a short position
Robert,
The Fed is backing off. Third week in a row that assets declined. Now down $262 billion from the peak. Did you miss that?
“It just doesn’t make sense how $ is weakening against currencies like the Indian Rupee.” Well, for one thing, do you have any idea how much fiat the relative countries are printing? The relative expansion of the national debt? So how can you say the $ weakening vs the rupee makes sense or not? One of the few things we do know is that India has a much longer history and greater tolerance for the sight of people starving in the street.
OMG! Vital clothiers are shutting down. What if they stop making ties. How will others spot my natural authority to order obedience and mete out correct amounts of punishment?
Oh! and boo-hoo. I will be instantly seen as just another commoner. Snifff. To think that laws will soon written by ordinary workers without ties.
Wait! I know how to make the tieless quail in my presence.
I will wear a sign that shows my way-above average IQ. Every ordinaryone will be warned of my superior being!
Intelligence shall rule… I read it in Jay Gould’s “Mismeasure Of Man”. I forget what page. But if you wear ties, you will love reading it.
When I saw that Brooks Brothers was going bankrupt, I thought about the poor Antifa fellows. Where they gonna get their threads?
Most people now wear what was historically the dress of the lowest class: hatless, with some kind of more or less universal, untailored tunic, maybe leggings or even Paulo’s horror-story shorts, which sound like the sort of thing slaves in mines would have been issued with under Rome.
This itself embodies the profound decay of our civilisation.
The hoodie.
Oh, and what passes as music today (specifically lyrics) is supportive evidence, too.
Yup, their tax base is leaving. Going to be one epic big Baltimore.
It’s surreal to me. I want to believe otherwise but logic and reason leave me no other choice than to face the hard reality.
Who in their right mind would consider opening a business or moving their family into NYC, Seattle, Portland or SF?
I doubt even credit cards will survive this great Reset/reboot. Without debt, the entire American model goes poof.
Families are realizing, 40% or so, that they can and should be homeschooling. Why deal with commutes, pollution and crime? I live 30 minutes from a small town community, get everything I want either there or via USPS/FedEx/UPS delivery.
The only city I would consider living in again is Tokyo. Clean, civilized, cultured and dreamy. I would never consider an American city again until after the purge and that may take longer than God has granted me.
My son has lived as an ex-pat in Tokyo for years. It’s lonely being a non-Japanese in Nippon. One is forever the foreigner.
Favelas R U.S.
Sad. I liked BB. Haven’t worn suit regularly for years, but it’s still nice to be able to wear a nice suit on occasion.
Now I guess it’s all lycra tank tops and drop-crotch hemp yoga pants. *sigh*
Gold and Silver lookin pretty sweet today people Better get on board while you still can Have a nice day ?
whats the best way to invest in gold and silver ? gld, slv, gdx ?
It would be rough forecasting for retail. Normally, the huge back to school shopping season would be coming soon, but who knows if there will be school attendance in most places. The school district for my grandkids will be asking parents next week if their kids will be attending or studying from home. Most likely, most kids will stay home unless the parent must work away from the home.
Does this mean more eCommerce because retail outlets may not order adequate stock, thus forcing even more business to the online option?
Many US companies were operating with too little capital to survive a major downturn, to maximize officer’s bonuses and Wall Street’s profits. Certainly, as to those clothing companies, the need to work at home also means that demand for new suits largely ceased.
Too many US companies were operating by bankster rules: taking for Wall Street without regard to good administration, such as a certain manufacturer whose quality standards declined after they moved their headquarters. Sadly, they are not connected enough to the banksters at the “Fed” to qualify for free money like the banksters’ cronies.
Subsidized, foreign companies will continue with aid from the CCP, which is giving free money to the Chinese communists’ companies. Thus, certain niches may soon be occupied by their companies.
More US bankruptcies or workouts will follow as the clusters continue, maybe even in winter, if no cure or truly effective treatment is widely available. Too many Wall Streeters have followed Enron’s example and are operating US companies for quick profits and no longer to produce quality products, without concern for their companies’ reputation or longevity.
The banksters’ desire to fleece the public and their customers has become the new normal in too many companies. This will result in many more of America’s icons losing their prestigious reputations and solvency, even if the pandemic had not happened. This pandemic will cause more and more bankruptcies because to make the most profits for their capital invested too many companies were run without adequate capitalization.
Amazon will mention all these once luxury brands and sell their products online. All the former store employees can work in the Amazon warehouses (until they’re replaced by robots).
By the time the whole system falls apart Jeff Bezos will be happily living on the planet mars (or Planet Bezos, as it is called by the natives).
Methinks he might become the first ever trillionaire.
Ahh, but who gets to be the first American ever to sell their entire citizenship to the highest bidder from a foreign nation and swap places?
Bezos is more a Moon guy. You can have a conversation with somebody on the moon. Not with Mars. And Amazon is not the place to sell luxury items on the web
So, does this portend a shortage of ‘whiteshoes’ as well ??
I mean, that right alone would seem a godsend to those who reside in the reaches of Lower Plebistan.
Yelp: Local Economic Impact Report
Updated June 25, 2020
https://www.yelpeconomicaverage.com/yelp-coronavirus-economic-impact-report
Of all business closures on Yelp since March 1, 41% are permanent closures. Our data shows the largest spikes of permanent closures occurred in March, followed by May and June, indicating that the businesses that were already struggling had to permanently close right away and the businesses that were trying to hold on, but unable to weather the COVID-19 storm, were forced to shutter in recent months.
There was never a need for multiple restaurants in every nook and corner of neighborhood. Sadly, this Covid19 may prove to be a great purger in the next year or two. Covid19 is not stemming but increasing day over day and stock market is going up and up. A time may come when the bleeding edge evaluation has to come terms to earnings and how can they get earnings if US has 20% plus unemployment… It’s gonna be interesting..
I think about Apple and Tesla as they sell things which commands a premium because of perceived status symbol. Would people still pay top dollars for these when they are either unemployed or have financial insecurities.
Merica broke. Not many dress anymore. There you go. Times change…dollar devalues.