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| Economy |
| Online shopping dooms brick and mortar stores/malls |
| 2016-10-23 |
| [Reuters] - The dramatic shift to online shopping that has crushed U.S. department stores in recent years now threatens the investors who a decade ago funded the vast expanse of brick and mortar emporiums that many Americans no longer visit. Weak September core retail sales, which strip out auto and gasoline sales, provide a window into the pain the holders of mall debt face in coming months as retailers with a physical presence keep discounting to stave off lagging sales. Some $128 billion of commercial real estate loans - more than one-quarter of which went to finance malls a decade ago - are due to refinance between now and the end of 2017, according to Morningstar Credit Ratings. Wells Fargo estimates that about $38 billion of these loans were taken out by retailers, bundled into commercial mortgage-backed securities (CMBS) and sold to institutional investors. Morgan Stanley, Deutsche Bank and other underwriters now reckon about half of all CMBS maturing in 2017 could struggle to get financing on current terms. Commercial mortgage debt often only pays off the interest and the principal must be refinanced. The blame lies with online shopping and widespread discounting, which have shrunk profit margins and increased store closures, such as Aeropostale's bankruptcy filing in May, making it harder for mall operators to meet their debt obligations. |
| Posted by:Besoeker |
| #8 Contra Sears, take a look at the Sweetwater (musical instruments and stuff) catalog. They send out at least four 3/4 inch thick catalogs, and have a great web site. They do have a store, in Ft. Wayne, IN. A bit far for me to drive, but gear, showrooms, soundstages, and studios. They should break a billion in sales this year, easy. Nice people, good policies, individuals that know what you want and what you might not want. A new kind of hybrid, maybe. Or maybe the old time Sears w/ catalog with just one store but great Amazon plus service. |
| Posted by: Whiskey Mike 2016-10-23 22:21 |
| #7 Back when, I could order what I needed from the Sears catalogue. Pre-internet times. I would get what I ordered within a reasonable amount of time, and on occasion they would send the next better model if what was ordered was out of stock. No more. The catalog disappeared. Now the physical store is 'the catalog'. It is rare to find something in the store that I want and is in stock. I don't bother anymore; haven't for years. The stores have become alien places. Amazon works well enough for me. |
| Posted by: Whiskey Mike 2016-10-23 22:08 |
| #6 Also, online retailers don't get sued when someone slips on some spilt shampoo, etc. |
| Posted by: phil_b 2016-10-23 19:28 |
| #5 Creative destruction: out with the old and in with the new. Amazon is opening a chain of retail food markets and even a couple of bookstores. |
| Posted by: The peanut gallery 2016-10-23 17:24 |
| #4 IIRC, the USA has vastly overbuilt brick & mortar retail facilities, much like the housing bubble. The cheap money / ZIRP has encouraged wasteful investment in a doomed industry. |
| Posted by: Anguper Hupomosing9418 2016-10-23 11:15 |
| #3 Online shopping dooms brick and mortar stores/malls Who wouldn't be in the position they are if they hadn't used the phrases "It's out of stock" and "We can order that for you" way too often. It all evolved to 'cutting out the middle man'. It's the impact upon an economy in which their businesses were gatekeeper when the number of households with (analog) phones was much lower and the cost of long distance was incredible high by today's standards. Also tie that with technological expansion driving the costs down in transportation and delivery (anyone remember Railroad Express and USPS Special Delivery?). |
| Posted by: Procopius2k 2016-10-23 09:47 |
| #2 I am told that shrinkage, armed robberies, and assaults are much less of a problem with online shopping True. Just means a smarter breed of criminal will come along. |
| Posted by: Pappy 2016-10-23 08:26 |
| #1 Whilst not mentioned here, I am told that shrinkage, armed robberies, and assaults are much less of a problem with online shopping. Encouraging to learn that 'widespread discounting' is actually the problem. [sarc off] |
| Posted by: Besoeker 2016-10-23 03:35 |