Investors bet on this outcome for years. Covid-19 just sped it up by a few months. Department Stores Are Toast.
Store liquidations in 2019 have blown past the full-year total of 2018. The phenomenon is proceeding with relentless momentum.
In 2013, I called Goldman Sachs a “snake-oil salesman” for underwriting a $1 billion J.C. Penney stock offering. Investors got wiped out. Now the longer-dated bonds, including a 100-year bond, have collapsed.
“I prefer not to scare you at this point, okay. But it’s something that we’ve been able to withstand”: CEO David Simon.
I’ve been doom-and-gloom on brick-and-mortar retail. But I haven’t been nearly doom-and-gloom enough, given the events of the past seven days. Includes my interview with The Financial Exchange, WRKO Boston.
Why would anyone buy this crap? No, not the clothes in J.C. Penney’s stores – which practically no one is buying – but the shares it just sold. It desperately needed to raise capital because it’s bleeding cash and won’t be around much longer without lots of new cash to bleed. So it did. At a horrendous expense, overnight, to existing stockholders.