Department Store

Retail store expansion could get a boost from lower rents in the next 12 months as real estate investment trusts react to volatility in global financial markets, according to Pacific Investment Management Co.   In a report titled, “U.S. Real Estate: A Storm Is Brewing,” PIMCO portfolio managers John Murray and Anthony Clarke forecasted a drop of as much as 5% in commercial real estate prices due to a confluence of factors including public market volatility, tightened regulations, and uncertain foreign capital flows.

Watch out Best Buy, the nation’s largest ecommerce retailer is on your tail.   According to a report by barrons.com, Amazon has moved ahead of Walmart to take the number two spot, behind Best Buy, as the nation’s largest electronics retailer.    

Nordstrom  plans to shutter its location at Horton Plaza, in downtown San Diego.  The store, which opened in 1985, will remain open through August 26, 2016.   "These are always tough decisions to make, but in taking a look at the store's performance and our business needs into the future, we believe this is the best direction to take," said Jamie Nordstrom, president of stores for Nordstrom. "We look forward to serving our loyal Horton Plaza customers at our other San Diego stores.”  

J.C. Penney announced a positive development on the financial front.   The department store retailer announced it has successfully completed refinancing its $2.25 billion five-year senior secured term loans, which should generate about $24 million in interest expense savings.  

Macy’s longtime CEO, Terry Lundgren, will step down in the first quarter of 2017, to be succeeded by a company veteran.    Lundgren, who has been CEO of the department store giant since 2003,  is stepping down as the retailer finds itself challenged with a transformed retail landscape and changing consumer demands.  He will be succeeded by Jeff Gennette, 55, who was named president of Macy’s in 2014 after serving as chief merchandising office since 2009. 

Bed Bath & Beyond Inc.’s  first quarter profit  declined amid flat sales and  increased expenses that cut into its bottom-line.   The company’s profit fell to $122.6 million from $158.5 million in the year-ago period, less than analysts had expected.   Sales remained flat year-over-year at $2.74 billion, also below estimates. Same-store sales decreased 0.5%. 

Some things are easier said than done. And increasingly, that notion applies to closing stores.   Although analysts and investors say that retail companies need to continue to shrink their store portfolios, the decision to do has become increasingly complex for merchants, many of whom have already shed their most unprofitable locations, according to a CNBC report.  

Ross Stores will open eight new dd’s Discounts stores in the coming week, bringing the coverage of its moderately priced apparel chain to near 190 units. Ribbons will be cut at stores in Delano, Fairfield, and Stockton, California; Margate and Palm Springs, Florida; Marrero, Louisiana; and Pasadena, Texas.