Strategy

Moody's Investor Services is feeling positive about Amazon's plans to acquire Whole Foods Market.     The ratings agency assigned the deal a Baa1 rating and revised Amazon’s credit outlook to positive from stable, reported Marketwatch. The report also said that Amazon is planning to issue up to $16 million in debt to fund the online giant's acquisition of Whole Foods.  

As 20th Century malls give way to 21st Century mixed use centers, retail tenants need to arm themselves against giving away too much away during lease negotiations.   That’s the caution of National Retail Tenants Association director Paul Kinney, who strongly advises retailers to consider both long and the short-term implications of the leases they sign.  

German discount grocer Aldi is jumping into home grocery delivery.   The retailer announced a pilot program with Instacart, the on-demand grocery delivery service. Starting later this month, the service will be available in Atlanta, Dallas, and Los Angeles, with potential for future expansion.  

Online made-to-measure retailer Indochino expands its brick-and-mortar footprint with its largest location to date, a 4,100-sq.-ft. space at King of Prussia mall, King of Prussia, Pa.   The new outpost caps off a busy summer for the Canadian retailer, during which it also opened a second location in New York City, and flagships in Chicago and Washington, D.C. Earlier this year, the company opened two storefronts in Canada, in Edmonton and Vancouver. It currently has a total of 17 stores in North America.    

Although J.C. Penney's numbers are not a disaster and represent a significant sequential improvement over the prior quarter, they are nevertheless underwhelming. While we maintain the company is moving in the right direction, the lack of progress on profit and same-store sales both highlight that the turnaround program is a long-term endeavor that will take some time to deliver.  

Liquidation efforts took a toll on J.C. Penney in its second quarter, which reported earnings and same-store sales below estimates.    Penney's net loss widened to $62 million in the quarter ended July 29, or 20 cents per share, from $56 million, or 18 cents per share, in the year-ago period.   

The chief executive of the nation's largest specialty pet retailer of services and solutions has left the building.   PetSmart announced that Michael J. Massey has stepped down from his position as CEO, president and board member. Raymond Svider, managing partner at BC Partners, will serve as executive chairman and oversee the company’s operations with the senior leadership team while the board searches for a new chief executive.   

Ground has been broken on Kimco’s 102-acre Dania Pointe project in the Dania Beach section of Fort Lauderdale.   Phase one of the mixed-use development will include 300,000 sq. ft. of retail, 80% of which is already leased, according to the company. Along with the requisite food and beverage establishments, TJ Maxx, Hobby Lobby, BrandsMart, and Ulta Beauty have signed on as tenants.  

Costco Wholesale Club has tapped its longtime director as its new chairman.   The company announced the election of Hamilton “Tony” James to the position of chairman. He replaces Jeff Brotman, who co-founded Costco with James Sinegal in 1982. Brotman passed away unexpectedly on Aug. 2.  

After a torrid opening quarter, Macy's second quarter numbers come as a relief. Certainly, a same-store sales decline of 2.8% is far from good, but it is one of the better performances Macy's has turned in over recent periods. Of course, the question is whether this gentler decline represents a genuine turning point for Macy's, or whether it is simply a bottoming out after years of sharp deterioration.