Montreal-based shoe retailer Aldo Group Inc. announced Thursday it filed for creditor protection in Quebec, and will seek similar court orders in the US and Switzerland, as the fallout from COVID-19 continues to weigh on Canadian companies. https://www.bnnbloomberg.ca/aldo-files-for-creditor-protection-amid-too-much-pressure-from-covid-19-1.1432986
Reitmans Canada Ltd will seek bankruptcy protection in a Québec court on Tuesday, becoming the latest retailer to face the brunt of the COVID-19 pandemic, which has led to prolonged store closures. https://nationalpost.com/news/canada/canadas-reitmans-to-seek-bankruptcy-protection-as-covid-19-shuts-stores
New York — J.C. Penney Co Inc. filed for bankruptcy protection on Friday with plans to permanently close some stores and also explore a possible sale, making it the latest brick-and-mortar retailer to crumble as prolonged store closures in response to the COVID-19 pandemic drive a final stake through long-troubled businesses. https://business.financialpost.com/pmn/business-pmn/j-c-penney-files-for-bankruptcy-protection-2
On Thursday, all of that came to an abrupt halt when Neiman Marcus became the first major department store group to file for bankruptcy protection during the coronavirus pandemic. It’s a stunning fall that follows the collapse of Barneys New York late last year and comes as shadows gather over chains like Lord & Taylor and J.C. Penney. https://www.nytimes.com/2020/05/07/business/neiman-marcus-bankruptcy.html
These are just a few examples of the grim impact that the pandemic is having on retailers who were already suffering from the impact that online shopping was having on their in-store traffic and sales. In Canada, Reitman and Aldo banners were considered “A” tenants. Many landlords will suffer increased vacancies and eventual, inevitable downward pressure on rents, and a downgrade of asset quality resulting in higher CAP rates and mortgage interest rates. There will be exceptions. Strip mall operators that focus on “essential services” such as food retailers and pharmacies will have do better than enclosed malls or centres that are fashion oriented.
Many shopping mall, main street, and high street store fronts were vacant before COVID-19 and now there will be many more vacancies as the virus-related ten-plus week closures take their toll. Changes to the retail industry that were already in motion will accelerate challenging merchants, landlords, and municipalities to find new formats for bricks and mortar retail that are relevant and unique.
To imagine the future of retail, it is useful to consider emerging trends before COVID-19:
On-line shopping has been stripping sales from retail malls and main streets for several years now and the current health crisis has increased the speed of evolution closer to revolution. The online experience has got to be easy and it has got to be worth it. Some retailers do it very well, typically those that have started out as on-line sellers, but others drive me crazy. Buying on-line from many of the big “bricks and mortar” retailers such as Wal-Mart, Canadian Tire, Home Depot, and many others is like going to purgatory. The Amazon web site drives me crazy so I refuse to use it.
If the conditions are right, people want to be out and to go shopping but they also want an experience they can’t get by browsing on the sofa with their I-Pad. Clients are attracted to stores that offer something different and shopping areas that have a dynamic atmosphere.
And, as always, wash your hands, practice social distancing and wear a face mask when you can’t, hydrate, and exercise!
In Issue 6 dated April 16, ideas for the return to work included a permanent increase in the work-at-home model, staff rotations on a work-at-home / work-at-office rotation; split work weeks; reductions in workplace density; and in the longer term, a shift away from concentrating 1000 plus employees in high-density single locations to less dense configurations in smaller, more accessible buildings. As companies re-open their offices and manufacturing facilities, all of these ideas are being used by employers. Shopify expects to keep most of its employees working at home until at least January and expects many of its existing employees will work at home on a permanent basis.
In Issue 9 dated May 5, I suggested that restaurants and high street retailers needed cities to contribute to their revival by converting huge sections of the city to pedestrian malls and to allow for radical expansion of outdoor dining and retail sales. Since that time, there have been a parade of announcements by cities across North America and Europe announcing measures to close streets to cars to allow for more space to walk, cycle, scoot, shop, and dine. The City of Montreal first announced 327 kilometres of new bike and pedestrian paths and more recently announced an additional 40 kilometres of pedestrian streets. There will also be allowances for expanded terasses when restaurants re-open sometime in June.
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People living on the street have come to symbolize the global housing crisis but they are only the tip of the iceberg. While the examples of Finland and Houston demonstrate a focussed plan pursued diligently can resolve the housing situation for the chronically homeless, addressing the affordable housing problem is much more complex. Defining Affordability […]
I love to dance. This is not something new for me. I can’t remember when I didn’t like to move to the music. My first memories of watching others dance come from my childhood in Cape Breton where I would watch the adults square dance. Then, there were the step dancers who would often accompany […]
Kings Cross, once a thriving industrial and transport centre in London, was effectively closed off to the public by the end of the 20th century. Then in 1996, the decision was made to move the British terminus for the Channel Tunnel Rail Link from Waterloo to St-Pancras. The landowner saw a re-development opportunity for […]
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A Visit from Saint Nicholas A Poem by Jonathan Potter – December 2022 ‘Twas the first mask-free Christmas, when all through the stores The vaccinated children were spewing their spores;The shoppers were eagerly starting to riotAs the introverts longed for some quarantine quiet. The public healthcare workers were tracing the pathOf the flu and RSV, […]