From Wolf Richter at wolfstreet.com:
Brick-and-mortar retailers are sinking into a quagmire – even luxury retailers, like Tiffany and Company.
So, sure, they’re still looking pretty good when compared to the oil and gas industry, which is in a depression, laying off well-paid people, from director-level engineers to roughnecks. Contractors are out of work. Revenues are plunging. Losses are piling up. Cash is running out. Bankruptcies and debt restructurings are now a common occurrence. The junk-bond bubble that funded the US drilling boom is imploding. Banks are starting to recognize losses on their loans. But the sector has been through this before. It’s temporary. When the price of oil rises again, the survivors and new players will thrive, hire, and expand.
That’s not the case with brick-and-mortar retailers.
But it’s a slow process. Some bigger operations have already gone bankrupt recently or have defaulted on their debts. Junk bonds that fund much of the industry are swooning. Liquidity is drying up. And many private equity firms that bought these retailers during boom times and loaded them up with debt are now stuck with them [Defaults and Restructuring Next for Retailers].
Among the list of brick-and-mortar retailers to warn of crummy holiday sales is luxury jeweler and specialty retailer Tiffany and Company. It reported this morning that sales during the holiday period fell 3% on a constant-currency basis: 5% in the Americas and 6% in the Asia-Pacific region. Sales at stores that were open at least a year dropped 5%. And it lowered its guidance.
To continue reading: Tiffany Sings Brick-and-Mortar Blues
