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The worst of the retail apocalypse is on the way

(BUSINESS NEWS) We’ve long lamented the decline of big box retail, but one report says the “Retail Apocalypse” is just beginning and it’s about to get much worse.

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You have likely already noticed the impacts of what has been darkly dubbed America’s “Retail Apocalypse”: Half-empty strip malls, brightly-colored signs announcing closing sales, or maybe your once-favorite department store has declared bankruptcy.

Whatever you’ve seen, it’s only going to get worse, according to a comprehensive report from Bloomberg, implying certainty in the fall of the retail industry as more than just sensational news headlines.

U.S. retailers announced more than 3,000 store openings in the first three quarters of this year, but that’s coupled with 6,800 chain store closures. All while consumer confidence levels are high and unemployment is low, and the economy keeps growing – a mix you’d think would be conducive to retail growth and strength.

However, more and more retail chains are filing for bankruptcy and financially distressed. This has caused an increase in the number of delinquent loan payments from malls and shopping centers containing said retailers.

So what’s the deal?

No, it’s not because Amazon.com is taking over the world (yet) or because millennials would rather travel than buy more “stuff.”

The primary cause for the retail apocalypse is not buying habits, it is that many failing retail chains are overloaded with debt.

There are billions of dollars tied up in the borrowings of troubled stores, and that strain is going to become even harder for the market to handle.

The impact of retail’s crash and burn will be felt across the country and economy. Low-income workers will be displaced, local tax bases will shrink, and investor losses on stocks, bonds, and real estate will grow.

In a nutshell: It’s only going to get worse.

Until recently, retailers avoided bankruptcy by refinancing their debts. However, as the market has evolved, lenders have become less forgiving, according to the Bloomberg report.

Additionally, an overwhelming amount of risky retail debt is coming due within in the next five years. For example, teen costume jewelry chain Claire’s Stores, Inc. has $2 billion in borrowings that will start maturing in 2019 – and it still has 1,600 stores open in North America.

In fact, $100 million of high-yield retail borrowings are set to mature this year alone and that will jump to $1.9 billion in 2018, according to Fitch Ratings Inc. data cited by Bloomberg. Between 2019 and 2025, that figure will expand to an annual average of almost $5 billion.

And, while the demand for refinancing increases, credit markets are tightening. Thus far, retailers have delayed their doom thanks to the money the Federal Reserve has pushed back into the economy since the Great Recession. Low interest rates made the risker retail debt (and the higher return it brings) more appealing. But now as the Feds raise their benchmark interest rates, that demand will decrease.

Then there’s the matter of store credit cards. The largest private-label card issuer, Synchrony Financial, has already increased reserves in order to help cover loan losses this year. Citigroup, Inc. has reported declining rates on retail portfolios, too. Why? Because shoppers are more likely to stop paying back their retail card debt if the store they went to has closed.

As all this compounds, it could directly impact the industry that employs the largest number of Americans who are at the low end of the income scale. According to Bloomberg’s research, salespeople and cashiers in this industry totaled a whopping eight million. Since our last financial crisis, employment rates have been steadily increasing, even in the retail industry. Until this year, that is. Retail store jobs have decreased by 101,000 this year so far, no thanks to store closures.

Many of the largest U.S. retailers (think Target and Walmart) have decided to reduce their brick-and-mortar space. Sure, the e-commerce boom has taken a toll, but the U.S. has been considered “over-stored” ever since investors poured money into commercial real estate as the suburbs boomed decades ago, which began an era of big box stores.

It’s time for that boom to bust.

At the end of Q3, 6,752 U.S. retail locations were scheduled to close, excluding grocery stores and restaurants, according to the International Council of Shopping Centers. That’s more than double the 2016 total and inching close to the all-time annual high of 6,900 recorded in 2008, the midst of the recession.

Clothing stores have taken the hardest hit, as 2,500 locations are closing. Department stores aren’t faring well, either. Macy’s, Sears and J.C. Penney are all downsizing.

Overall, about 550 department stores plan to close their doors.

This really does sound apocalyptic, doesn’t it?

The consumer impacts of what’s to come will be widespread. Ohio, West Virginia, Michigan and Illinois have been some of the hardest hit so far, but other states will feel the burn, too. Florida, for example, relies on retail salespeople more than any other state, according to Bureau of Labor Statistics cited by Bloomberg.

Insert a grimacing emoji face here.

I think Charlie O’Shea, a Moody’s retail analyst for Moody’s, summed up the retail industry’s prospects impeccably at the end of Bloomberg’s report: “A day of reckoning is coming,” he said.

Sienna is a Staff Writer at The American Genius and has a bachelor's degree in journalism with an emphasis in writing and editing from the University of Wisconsin Oshkosh. She is currently a freelance writer with an affinity for topics that help others better themselves. Sienna loves French-pressed coffee and long walks at the dog park.

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3 Comments

3 Comments

  1. Paul O'Brien

    December 4, 2017 at 1:43 pm

    As is what’s happening with many other industries, retail’s reckoning will come and through it retailers will wake up to the fact that what people are willing to pay for is experiences.

    What the heck does that mean in this context??

    I’m not going to drive and shop at a local retailer to get the exact same plastic junk or $5 shirt that I can get Amazon to send to me in an hour.

    But let’s not neglect that people like to shop – as an activity or social experience. Shopping isn’t just about consuming the things we want or need – it’s a matter of what it has always been in certain contexts: an experience to see products, hang out with friends, or just spend some time doing something you enjoy.

    The reckoning is in the price competitive stores pushing commodities, aggressive Sales pressure (autos), and regularly purchased products. There is no market for a store front for those things.

    But what we might be excited about that could thrive are the experiences we enjoy: Local artists and products, food & beverage, specializations in innovative goods (tech, apparel, autos), etc.

    “Clothing stores have taken the hardest hit, as 2,500 locations are closing. Department stores aren’t faring well, either. Macy’s, Sears and J.C. Penney are all downsizing.”
    — Yeah… because I don’t need to drive, park, and deal with the awful layout of a big box store just to get the same pair of jeans I’ve been buying for the last 20 years.

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How remote work has changed over the last decade

(BUSINESS NEWS) let’s reflect on how remote working and telecommuting has changed in recent years and look to how it will continue to change in the 2020s.

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As someone who often works remote, it’s interesting to see how much that means for work has evolved. The increase in commonality has been steady, and shows no signs of slowing down. Go Remotely has developed an insightful graphic showing the changes in trends regarding remote work over the years.

“For decades, the established economy dictated that you should pick one job, visit the same office for the next 40 years, and then retire,” reads the graphic’s intro. “However, recent remote working stats suggest the working world might be in for some revolutionary changes.”

From there, the graphic is broken down into five facets: Flexible Workspace Policy, Entrepreneurial Minds, Telecommuting is a Growing Trend, The Role of Companies in the Remote Working World, and The Future of Telecommuting.

With Flexible Workspace Policy, its suggested that telecommuting could be a solution for costly issues including lack of productivity caused by employee distractions, health problems, etc. It is said that employers lose $1.8 trillion annually due to these issues.

The end of 2018 found 35 percent of the US workforce working remotely. This is only expected to climb. Ten percent of employees don’t know if their company offers flexible work policies (this is something to check into!)

Bills and laws for virtual jobs passed by governments reflect the need for accessibility, economic stability, and emigration concerns. Companies with flexible work policies have reported seeing increases in productivity and profits. (Funny those both start with pro, no?)

With Entrepreneurial Minds, a few interesting things found include: remote workers are less likely to take off if they are sick, the majority reports better productivity when working alone, the majority reported lower stress levels. However, there is a problem with not being able to unplug after work which is an issue for some.

Telecommuting is a Growing Trend finds that there has been a seven percent increase between 2012 and 2016, with the majority (80-100 percent) reporting they work remotely. Industries seen embracing remote work include: transportation, computer/information systems/mathematical, arts/design/entertainment/sports/media, finance/insurance/real estate, law or public policy, community/social services, science/engineering/architecture, manufacturing or construction, healthcare, education/training/library, and retail.

The Role of Companies in the Remote Working World finds that the pros to hiring remote workers includes: finding talent outside of your geographic area, improves retention on work/life balance, increases productivity by decreasing commute time, and saves money by requiring less office space. The cons include lack of timeliness when it comes to receiving information from employers.

Finally, the Future of Telecommuting suggests that in 2020 the US mobile worker population will surpass 105 million (and will account for 72 percent of the US workforce). Hiring managers predict that telecommuting will increase tremendously, most skills will become even more niche over the next decade, and many think that 38 percent of their full-time workers will be working remotely in the next decade.

How do you feel about the increase in remote working and telecommuting?

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Business News

ClickUp team productivity app is gorgeous and wildly efficient

(BUSINESS NEWS) Seeking to improve your productivity and speed up your team, ClickUp is an inexpensive option for those obsessed with efficiency.

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Back again to obsess over productivity apps – ClickUp, is a project management tool seeking to knock the frustration out of PM. It’s getting some good reviews, so I gave it a try for a week by setting up my current job search as a project and getting a feel for the app. And as you’ve read in my other reviews, we will address features and design.

On the feature front, ClickUp offers a pretty standard set up of tools for a productivity app. What stands out first and foremost are the status options. In general, most productivity statuses are simple: not started, started, in progress, done, etc.

But ClickUp lets you set up custom statuses that match your workflow.

For example, if you’re doing instructional design projects, you may assign projects based on where they are flowing in an ADDIE model, or if you are a Realtor, you may have things cataloged by sold, in negotiation, etc.

Customization is king and custom status is the closest you get to building your own app. And if you like it simple, you don’t have to customize it. The assigned comments feature lets you follow up on specific comments that originate action items – which is useful in team collaborations.

You can also assign changes to multiple tasks at once, including changing statuses (I would bulk assign completion tasks when I finished applications that I did in batches). There a lot of features here, but the best feature is how the app allows you to toggle on and off features that you will or won’t use – once again, customization is front and center for this platform.

In terms of design and intuive use, ClickUp nailed it.

It’s super easy to use, and the concept of space is pretty standard in design thinking. If your organization uses Agile methodology, this app is ready for you.

In terms of view, you can declutter the features, but the three viewing modes (list, box, and board) can help you filter the information and make decisions quickly depending on what role you have on a board or project. There is also a “Me” board that removes all the clutter and focuses on your tasks – a great way to do focused productivity bursts. ClickUp describes itself as beautifully intuitive, and I can’t disagree – both the web app and mobile app are insanely easy to use.

No complaints here.

And the horizon looks good for ClickUp – with new features like image markup, Gannt charts (!!!!!! #nerdalert), and threaded comments for starts.

This application is great, and it’s got a lot of growth coming up to an already rich feature base. It’s free with 100MB of storage, but the $5 fee for team member per month that includes team onboarding and set up (say you’re switching from another platform) and Dropbox/Google Docs integration? That’s a bargain, Charlie.

ClickUp is on the way up and it’s got it all – features, a beautifully accessible UI, relentless customization, and lot of new and upcoming features. If you’re into the productivity platform and you’re looking for a new solution for your team, go check it out.

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Business News

Should you alter your business travel due to the Coronavirus?

(BUSINESS NEWS) Got a business trip coming up? Worried about the coronavirus spoiling those plans? Stay up to date and safe with this cool site!

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The Center for Systems Science and Engineering (CSSE) at John Hopkins University has created a website that tracks one of the biggest trends of 2020: the coronavirus. Also known as 2019-nCoV, this disease has already spread to over 40,000 confirmed cases worldwide, with over 900 deaths (as of when this article was published, anyway.)

Not to mention, the United States Center for Disease Control and Prevention (CDC) notes that we still don’t know exactly how the virus spreads from person-to-person. In fact, there’s quite a bit we don’t know about this disease and although some people are reported as recovered, it’s only a small fraction compared to how many are sick.

So, what’s so great about this tracker? Well, first of all, it updates in real time, making it easy to keep track of everything we know about confirmed cases of the coronavirus. It’s chock full of statistics and visuals, making the information easy to digest. Plus, with a map front and center, it lets you know exactly where there have been reported outbreaks – and how many people have been diagnosed.

Because the site sticks to cold hard facts like statistics and maps, it also means you can avoid the racism and general panic that’s accompanied news of this outbreak.

This is a great tool for staying informed, but it’s also extremely helpful if you’re going to be traveling for work. As the virus continues to progress, you’ll be able to see just how many cases of coronavirus there are in the areas you’re planning to visit, which will allow you to plan accordingly. Even if you don’t feel the effects, you can still risk passing it to other people.

(In fact, the CDC recommends those traveling from certain areas in China practice “social distancing” when they return to the US, avoiding public spaces like grocery stores, malls and movie theaters.)

Of course, if you have something planned several months from now, don’t cancel your conference plans just yet. A lot can happen in that amount of time, so avoid the urge to check the website every couple hours. It’s supposed to be a tool for staying informed, not staying stressed out.

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