Mervyn's used to advertise with the line "open, open, open..." as a desperate consumer peered in the window. In retrospect that seems a pretty pathetic segment to market to. Then again Mervyn's is in trouble because their debt window was closed on their fingers. What goes around comes around.
Looking forward to the 90% off sales. Better than thrift stores. Went to the Linen'N'Things in Moorpark yesterday on the way back from the secure housing bunker. They are closing many, many stores. this particular gem was only a few years old, an anchor bookending a Target. Neutron Strip Malls.
13 comments:
FIRST to hope Commercial Lending doesn't dry up. I've been working happily at a fairly small company that depends heavily on Commercial lending.
Let me be the first to say that this is not the last chain to close.
NR
Curse you Valjean. I am taking away your loaf of bread.
NR
I knew it was the end for Ventura County when our Krispy Kreme was taken from us!
I was telling my wife this weekend to check out Linens n Things to stock up on kitchen cooking appliances. Of course I was told by my FIL that he didn't think there was a problem and was sure someone was taking them over -- problem solved! This is the same guy who tells me that "his guy" tells him it doesn't matter what stocks you buy because when things turn it is all going up. Oh, and his own well thought out assessment is that the banks are just crying wolf.
It seems that Mervyn's is usually in the older shopping centers that will really lose foot traffic if Mervyn's leaves. The land is still very valuable, but I hope the owners are not too leveraged.
It seems cosmicly right that Mervyn's should join GEMCO and Montgomery Ward. JC Penny can carry on their legacies.
Rob, do you have a feel for how much leverage is used by owners of these large strip malls? Are there a lot of private owners who own them outright or are they usually held by REITs?
Picking on the bones on Linens 'n Things was great. I finally was able to buy a bunch of kitchen stuff that I had been trying to cost-justify for years.
As for Mervyn's, w is right when he says that they seem to be the thing that's keeping a lot of second tier properties alive. I can think of 3 or 4 strip malls that will have big dead spots when Mervyn's goes.
Now, the real questions in my mind are 1) when will Circuit city go bankrupt and which other middle class clothing retailer will go bankrupt next . I'm betting on J.C. Penny.
Oh well, it's not like we NEED a middle class.
The Krispy Kreme was in Oxnard so failure was to be expected. The location however might prove interesting for the placement of the retail neutron bomb that's about to go off.
At Linens'N'Things we got a shower liner and fancy corkscrew. I just don't understand them or Bed Bath & Beyond. I guess if people were pouring money into their houses because they thought the ROI was great or they were too stupid to realize towel bars aren't capital improvements.
Mervyn's could be the sstraw that breaks GGPs back. Reggie at boombustblog has been hitting them hard for months.
I'd say the REITs are in deep trouble because their business model is broken at all four corners. They cannot sell assets because there is no one to buy at tolerable prices, they cannot borrow against phantom equity, they cannot grow revenue and they cannot recapitialize.
Circuit City is obviously in trouble. Hoocoodanode that big ticket items would become commodities at Costco? Well me but that's just hubris talking. The big banana in that arena is Best Buy. Remember they make their nut with easy if onerous financing. They gotta be takin' a bath on charge offs.
In the big scheme of things it looks like our half century experiment with having a middle class is coming to an end.
So how big is the upper class going to be and can we get in? I expect the price of entry is going to drop now that the easy money is evaporating.
I suspect that being a skilled professional with a consistent job will be the dividing line. Like it used to be.
w, If the middle classes continue to decline then I don't think that being a professional with a job will be enough. You'll simply be at the top of the lower classes, much like tradesmen in medieval Europe.
Dawg,
I actually get BBB and Linens and Things. At least for kitchen equipment they are far better than the crap you can buy at target or WalMart or the overpriced stuff available at department and specialty stores. If Bed Bath and Beyond goes broke, I may end up buying kitchen equipment at restaurant supply stores, but come to think of it, I don't think I'll be buying more than $100 worth of that stuff next year unless I break down and buy a high end blender.
w said...
So how big is the upper class going to be and can we get in?
What do you mean "we?" ;-)
Seriously the dividing line will be productivity. People who make things or do things, real things will be fine.
High quality kitchen appliances are worth their weight in annoyance factor alone. You comment Winston got me thinking. Some of our everyday pots are 25 years old. Magnalite. Out of business now but still great stuff.
I'd give a major organ for a decent toaster.
Seriously, if professionals with serious family income in the 6 figure range can maintain that income in an environment of deflation they will be able to buy fancy homes, rental properties and stocks with less competition. Imagine having your income that you have now back in 1995. Imagine how much more you could save or afford to buy.
I'd give a major organ for a decent toaster.
Dualit if you can get them over there in CA.
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