Bloomberg reports 47,000 U.S. Stores Closed in About a Week Over Coronavirus.
In a little over a week, American retail ground to a near-total halt.
More than 47,000 chain stores across the U.S. temporarily shut their doors in 10 days as retailers took extreme measures to help slow the spread of the coronavirus pandemic that has rattled all sectors of the global economy, according to data compiled by Bloomberg. At least 90 nationwide retailers, ranging from Macy’s Inc. to GameStop Corp. to Michael Kors have temporarily gone dark.
Most have pledged to remain closed to the public for at least two weeks, but they may stay closed for much longer. In the same period, small retail businesses throughout the U.S. also hit pause on their physical locations but are not included in this list.
Timeline of Closures
The bulk of those stores expect to open by the end of the month.
Will they?
Even if they do, when will shoppers return?
How many hours will be cut?
Meanwhile …
U.S. Retailers Plan to Stop Paying Rent to Offset Virus
Please note U.S. Retailers Plan to Stop Paying Rent to Offset Virus
Major U.S. retail and restaurant chains, including Mattress Firm and Subway, are telling landlords they will withhold or slash rent in the coming months after closing stores to slow the coronavirus, according to people familiar with the situation.
In a brewing fight, chains are calling for rent reductions through lease amendments and other measures starting in April, said the people, who asked not to be named because the discussions are private.
Mattress Firm, with about 2,400 stores, sent landlords a letter last week saying it would cut rent in exchange for longer leases and offering two options to do so. This week, it sent a more urgent note revoking its earlier offer.
Retail real estate investment trusts may need to provide leeway on rent, Bank of America said this week after downgrading several REITs. The bank sees store closings lasting through May and the possibility of some locations going away as more fragile retailers are forced into bankruptcy.
“The court system is just going to get flooded with a million of these disputes between tenants and landlords,” said Vince Tibone, an analyst at Green Street Advisors. “If the government doesn’t step in in any form or fashion, it could get ugly. They need to respond quickly.”
We have a major problem brewing that the rescue package did not cover.
Mike “Mish” Shedlock
MONEY SUPPLY SHRINKING POSSIBILITY
. Basically inflated assets prices implosion is one cause of deflation, but a minor one as the bubbles are re-inflated quite quickly (and apparently easily in the past events) by the NMT adepts (FED, Treasury working in favor of the billionaires stock holders)..)
The main important cause of deflation we should have here because of the covid-19 is the FAILURE OF FURTHER MONEY SUPPLY EXPANSION (speculative and commercial) . Indeed with most activities in a country almost stopped nobody ask for new credits (house, car, speculation..) so the rate of new deposits creation is going to a halt.
However the fed know all that, that is the reason why NOW they lend (or almost give) printed money to every financial commercial entity (not only the primary dealers) allowing them to get new deposits out of their garbage papers (junk-bonds, credit card debts, student loan debt, car loans CDs, ETF…) Such life-saving deposits allow then these commercial entities to buy stock and ETF garbage from the individuals who want to sell but find no buyers. Will this compensate the shrinking loans demand and the consequent bank deposits shrinking?
As long as deflation win, the dollar will trend up.
The idea that in a few weeks or months everyone in America will just wake up one day and our economy will go back to the way it was in February is fantasy.
We are doing permanent damage to our economy every day with these lockdowns. Retail will never again return to where it was.
Never is a long time.
3 months ago people thought there would never be another depression.
3.28 million new weekly jobless claims just announced…we may be there sooner than you think
Oh, I wasn’t saying we’re not up s* creek.
I was saying that we won’t be there forever.
Dear All:
Mish is totally right…. The future is GOLD so you have something of value to sell, but…
These things last longer than people expect. Start accumulating GOLD now. Look for value in the Gov’t’s BUY EVERYTHING including your bad debts.
Accumulate GOLD over time. The end is ‘nearer’ than it was but it’s not tomorrow…..
an owner of 150 franchise stores just sent letter to all landlords
he will not be paying rent as he is invoking the force majeure clause in his leases
ie see govt – they shut him down across the board
The Safest Place for Your Money
FDIC asks Americans to keep their money in the banks
OK – I hear you and tomorrow….
Please have all my money in CURRENCY available…..
Assured by a politician? No thank you…
I’ll take all my money NOW!!!
and it’s… gone.
Sure, some BUSINESSES may not adapt/survive…
but the FOCUS should be on preventing the death of many, many PEOPLE.
AND flattening the curve so that our hospitals are NOT overwhelmed.
No NATIONAL response to this GLOBAL pandemic, other than throwing $…
STATE (Texas) punts to COUNTIES…
DALLAS County Judge Clay Jenkins orders shelter-in-place. He had an excellent presentation of facts and clearly stated “lives are more important than livelihoods”.
COLLIN County (where I live, just a bit north, same sprawling metropolis) proclaims that ALL BUSINESSES ARE ESSENTIAL.
So HERE, it is up to THE EMPLOYER whether or not it is “business as usual”.
Mine is taking precautions. May you all be blessed likewise.
P.S. I get it: for 4 out of 5, it won’t be a big deal. But the health system does not have the capacity to handle 20% of the population all at once. Flatten the curve.
I dare any of you to enter a dark cold dirty sticky to the touch movie theater I know who would enter one at any time in that condition but especially now. Or how about that princess cruise right about now or anytime in the near future?
Good point; it won’t happen without a highly credible treatment regimen that drastically improves the odds or a vaccine.
Sometime soon, someone from the Dept. of Health needs to stand up and define all the specific, clearly-defined issues that will justify them taking a year to approve the Sonofri vaccine started recently in Seattle. If the world is reduced to waiting for the last bureaucrat and politician to cover their ass, we’re on our way back to 1870.
Listening to Trump now on Bloomberg Live, and it strikes me he thinks he has power to declare lockdowns over, when in fact it’s up to the states. Trump could withhold aid to states and force them to shut under wartime powers, but to force them to open would require a lawsuit (interstate commerce clause) probably.
“…they can’t pay their notes.”
There’s the rub. And whatever you’re carrying the asset on the books for better be defensible in a courtroom on some future date as a legal slick asks, “Isn’t it true that you were deliberately misleading the investing public when you decided to list these obviously worthless properties at $xxx.00 and not $yyy.00 in your 10Q?
and so, to avoid that, the Fed and Congress, will print Trillions. It will be HUGE.
The other side of the coin is that most landlords are leveraged. If the rent isn’t coming in, they can’t pay their notes.
….etc., etc. All the way up to the guys running the actual money printers, in reality owning it all. As intended, as that is what makes allocating spoils arbitrarily most convenient.
Upside is, with quick and low friction BK processes, you really can cram the whole, pumped up pyramid down to Gold at $20/ounze, without much in the way of even short term real loss at all. And in the even slightly longer term, doing so is nothing but a massive win across the board. For anyone not solely dedicated to leeching at the debasement-theft trough.
The leeches will of course scream though. And in a country so thoroughly indoctrinated, that those guys are paid even a lick of attention; fat chance making America even remotely, $20/oz as the founders intended, great again.
I’m beginning to become extremely suspicious of Google’s studiously ignoring the Jewish doctor’s experimental results using Zinc and antivirals in a Hasidic community he serves north of New York City. If the doctor is being truthful, he is absolutely saving lives with his approach. Using death stats from Wuhan, Italy, Spain and France, he should be seeing a growing number of Covid-19 deaths daily. He reports none. He is treating symptomatic patients needing help with Zinc, Hydroxychloroquine and Azithromycin and monitoring all others.
The road north out of the city should be filled with reporters hell-bent on confirming or disproving this guy.
What’s happening, Google, CNBC, CNN, CBS, etc.? Are you all afflicted with TDS, anti-semitism…or both?
The Chinese were treating people with chloroquine, azithromycin, and remdesavir. They published about clinical trials Feb 19, when it was adopted in their standard therapy guidelines. Purportedly with good effects if started early enough in the infection’s progression. They also published on the effectiveness of combinations of all three (without one or both of the other).
Chloroquine phosphate is actually just being used as a zinc ionophore (to transport zinc ions across the cell membrane, where it interferes with a protein needed for RNA replication of the viral genome).
Chinese published Feb 4 about in vitro tests, Feb 19 on in vivo, and everywhere in the West moaning about how it’s all completely untested…
Chloroquine Phosphate: He used aquarium cleaner. You’re supposed to use chlorqine sulfate or hydrochloroquine sulfate for corona viruses.
Personally, I’m allergic to crazy deluded people spewing bullshit.
Humm a bunch of wealthy people with connections and good health care telling everyone to get back to work.
Humm i wonder what the cost to the economy of up to 2 million people dead that may have contributed to the economy for say 10 more years. Will cost.
Humm wonder what the cost of chaos is. If we just let this run its coarse money wise and future social unrest.
Humm Whats the effect of 2 t added to the debt.
Humm what about social upheaval and the next global war.
Lots of humms.
I would support a general strike until at the very least we get Medicare for all and paid sick leave. No one should be forced to go back to work and face getting a highly contagious virus which could leave them with hundreds of thousands in medical bills and permanently destroyed lungs just so “the line” can go back up and the rentier class can keep accumulating unearned wealth.
Trump is right. The cure will be worse than the disease. And, it’s not libertarian to order businesses shut down. I am staying away voluntarily. Those who don’t want to catch the virus should do the same. More people may end up with the virus this way, but at least they weren’t forced into it.
Many are hoping for a vaccine (which will be forced on us). Most vaccines work by utilizing the body’s immune system to produce antibodies to the pathogen. You can also get those antibodies by catching the pathogen but, if you get too much, you’re toast. I am not using gloves or a hand sanitizer so, when I get the virus, my hands will be the likely pathway. Hopefully, I won’t get too much.
How old are you?
Do you have any underlying conditions?
Working people will be forced into it. Show up, or lose your job, with no unemployment to back you up.
Or don’t show, massive depression, and you lose your job among other things.
For some reason i can’t post a comment but are given the option to reply.
The entire horse industry is in jeopardy because of the invention of the automobile, so let’s bail them out!
Brick & Mortar retail has had a slowdown already for sometime, the middle class has been struggeling ( courtesy of CB’s “income inequality” which are a result of their policies) and an outdated business model. Rather order online, got more choices, better deals and it arrives at my door step.
Of course there are exeptions. Still want to ride a horse for fun but not for daily transport.
Fair enough for you, but what about the people you infect and die from your hands
The US has the most rapid rate of infection of any country. You will be revaluating your attitudes on this in a month or so.
You don’t get too much of a virus. You just need one cell of it and it will reproduce inside of you.
And that is called innoculation.
Libertarians think it’s ok to get other people sick, survival of the fittest or some sh1t. I always said it’s an adolescent political theory, totally self-centered and self-absorbed without any kind of real respect of our social nature and societal structure.
Vaccine won’t be forced on people, but it will be strongly suggested. Once the vaccine is available, though, there won’t be any more reason for social distancing, so people opt out of the vaccine will get the disease. Still, it’s your funeral, as they say. 😉
How do you not write down an asset after a few weeks of this? Kitchen sink quarter dead ahead.
Every bean counter in America is stretching payables, squeezing receivables and calling their lawyer.
My ex wife and I started a business before we were divorced. We train and coach athletes who compete on a national level all over the nation.
This past June we opened a 30k square foot training facility for which we pay greater than $1 per square foot in monthly rent. Our utilities bill averages a combined $13 to $15K.
With the facility shuttered, I have disabled all the air handlers, lights, drink machines, ice makers…etc. So our utilities bills will be close to zero.
However, that has no effect on the rent.
Our ability to pay the rent depends on out customers continuing to pay us their monthly fees even though we aren’t currently training.
Should enough of them stop paying, we will have no choice but to stop paying.
I am guessing we have about 60 days before that happens.
Best of luck.
I’m still paying my gym dues and don’t really plan to stop. They have promised to add the time onto the end of the membership but for them that’s just moving the dates for which they don’t get paid.
Best wishes – Mish
Sorry to hear that you are in that position.
Would you consider making an appeal to your clients for support and if you have to, also with your landlord?
Good luck. Like you, I can pay the rent for at least a couple months. I’m actually still open, but with about 30% of the revenue. We’ll get through this. I’m sure that the landlord can’t evict everyone – who could they rent to, so they will work with tenants.
you guys all need better counsel/leasing agent
store owner with 150 franchise locations just sent letters to each landlord invoking force majeure clause in his leases that says HE DOES NOT HAVE TO PAY RENT IF GOVT SHUTS YOU DOWN
My next door neighbors (husband and wife) had a thriving business similar to yours. They trained cheerleaders for national competition and toured with then during football season. The business did well until winter/spring of 2019. The business closed at the end of April 2019 and their web site closed down in May. They are getting ready to sell the house next door that they bought in 2015.
We are still living in fantasy land that somehow, after a few weeks or couple of months everything will be back to normal and life will get going as before.
As of today, the only way to stop this is through sufficient vaccination, which is at least another year away. The other way is to slow it down through distancing (the third ways is to allow the virus to run quickly through the population ravaging it – and therefore not an option) and distancing means much of our non-essential business will remain closed.
Right now, the population is going through a process akin to slowly boiling a frog to death wherein the rise in temperature is slow enough that the frog does not jump out and by the time it realizes its predicament, its too late. Take action appropriately and pro-actively when you still have some resources, which you will need increasingly desperately as time progresses.
Distancing does not mean completely shut down. Once we flatten the curve, my expectation is that they will relax the shutdowns and rely on distancing. So long as the case rate stays in the 100,000 a month range, with perhaps 1-2000 deaths a month, it will be no different than a normal flu. The key will be to figure out just how much we can do without letting the cases explode. Concerts and big sporting events will still be a no-go, obviously, and travel, bars, and restaurants will also not return to normal, but many things will be able to have a semblance of normality.