It seems crazy to write about Christmas in August. But as the shopping season starts earlier and earlier, there’s more and more trouble brewing for retailers.
News that Macy’s is closing another 100 stores — after announcing 36 exits earlier this year — got raves from Wall Street as the nation’s flagship chain battles online competition from Amazon. It’s been a difficult year for mass-market merchants with Sports Authority and Sport Chalet tossing in the towel. Target also has cited weak store traffic.
Macy’s has been coy about which stores actually will be closing, leaving it up to folks like me to ask if any of the stores in the region could be on the chopping block. But you can bet the naughty and nice list will be out before the Thanksgiving Day Parade.
Morningstar reports that some $28 billion in commercial mortgage loans to shopping centers nationwide could be at risk.
The sprawling Macy’s at The Oaks in Thousand Oaks looks safe and it’s also hard to see Macy’s walking away from Pacific View Mall in Ventura. But in Santa Barbara, it’s harder to ring up a long-term future for two Macy’s stores — one downtown at Paseo Nuevo and a second at La Cumbre Plaza.
However, like everything else in Santa Barbara, it’s complicated. Macy’s actually has ownership of the Paseo Nuevo building, which may not do as much dollar volume as La Cumbre. However, La Cumbre is a leased property.
At one time, said someone with knowledge of the situation, there was talk about converting La Cumbre into an upscale Bloomingdales store. But that talk has faded.
If Macy’s were to leave the La Cumbre location, it could lead to a redevelopment around restaurants, lifestyle stores and maybe even housing to give Upper State Street much more of a neighborhood feel.
But like everything else on the South Coast, speculation about Macy’s future is pretty much just that — until something actually happens.
Deckers kicks it up a notch
Speaking of retail, Ugg parent Deckers Outdoor is getting some notice from Wall Street as a potential value stock. The company has been trading at just under 16 times expected yearend earnings and new CEO Dave Powers is going to have an easier time reaching targets in future quarters.
After selling off to as low as the $40 range in the wake of disappointing results and the general market meltdown, Deckers has been trading in the $67 range or close to its 52-week high of nearly $70.
One thing that all retailers know is that trends run in cycles. By managing more conservatively and focusing on product improvements, Deckers may be positioning for some stellar results. It’s gotten two favorable write-ups in the past week.
Meanwhile, Connie Rishwain, former president of the flagship Ugg brand, has joined sandal and comfort shoe brand Vionic Group as president of its global business.
Negotiate cheaper drug prices
One of the dumbest fiscal moves of all time was the decision to bar Medicare from negotiating cheaper prices for drugs under Part D pharmacy insurance programs. The fault lies with the Bush Administration and Congress which passed Part D, and the standoff between Congress and the Obama administration has extended this folly.
In an early sign that things could be changing under the next administration, a study published in the Journal of the American Medical Association has questioned whether two expensive cholesterol lowering drugs, Amgen’s Repatha and Sanofi-Regeneron product Praluent, are worth the estimated $129 billion it would cost if all eligible patients received them.
The prices would have to drop by 75 percent to be cost effective, according to an analysis of the study published by Bloomberg News. Giving Medicare the same ability that the Pentagon has when it comes to negotiating pharmacy benefits for military families would help reduce the federal deficit and bring costs in line with benefits.
• Reach Editor Henry Dubroff at [email protected]