I came here from 42rd Street, it was like being transported to New York around 1979, where you imagine being mugged at night. I’d take a look at any of the tactics from Grand Central Terminal, not for the cars, but for the option of an attack, they were so numerous.
Of course, the destruction of so many retail stores comes from the virus. You see so many empty or closed storefronts and you recognize the names: the independent ones, the ones that are intrinsic to the city. The survivors? Unnecessary banks that only open the week and therefore make the 42 Street glove even more complicated on weekends and, of course, foreign clothing chains like Zara and H-M. How long before the property closes, at least at some point, Loft, now bankrupt ascenaly?
Smart? There is no Lord and Taylor or Men’s Wearhouse in sight, the two ensembles that presented Chapter 11 this weekend.
In truth, like so many other retailers, they were zombies long before the pandemic. Men’s Wearhouse has been a victim of casual paintwear. Now it’s been decimated by the movement of house paintings. If you’re not going anywhere, you’ll want a suit, even cheap. Of course, I was born in a suit and would wear one over the weekend if someone else wanted it and made fun of my Saturday night French dolls.
Lord-Taylor went through a company called Le Tote for $100 million from the Hudson Bay Company in September. You can simply say that it is the stupidest acquisition ever made through a commissioning or the smartest sale through a pillar or both. The oldest retailer, however, had been catered a long time ago. I didn’t know the position where I got my first coat was still alive. It is the victim of so many trends: the top fashion specialty stores, the dying mall and the ease with which you can now buy what Lord and Taylor sells online. Of course, again, you don’t want more formal garments those days. Lululemon (LULU) will do.
I think the owner of Lord and Taylor, who hoped to expand the e-commerce site Lord and Taylor, might have had the idea that he may have had a massive Wayback device like the one used in an episode of Rocky and Bullwinkle or maybe HG Well’s The. Time machine.
However, in the end, the branch may disappear. We know that Neiman Marcus, the much more exclusive retailer, had too many debts and deserved bankruptcy even though I liked to buy there. I say this because retail branches have been cyclical beings, and who the hell even says it doesn’t? The corporate has become personal 15 years ago and is owned by Ares Management. Ill-advised.
Forty-two Street used to have many small shops, tourist-related flea markets and, of course, tons of small and very elegant restaurants and sandwich shops. Hiring had become too high in New York a long time ago. Any slowdown would have crushed some of those stores. But social estrangement is fatal for those kinds of small businesses. The pathetic setting of a handful of tables on the sidewalk of Capitol Grille, owned by Darden (DRI), turns out to be a kind of outpost, like Zinderneuf to Beau Geste. At least it’s open.
A vaccine can cure 42rd Street, but who knows how many other people would possibly not take the Grand Central exercise because running away from home is proving to be a very smart deal for both the company and partners. An antiviral can make you need a brave store.
But the most important thing to remember, as always, is that the real ones affected are non-public corporations. Will Macy’s (M) and Nordstrom (JWN) with a massive presence in New York be the beneficiaries of store closures, or will Lord-Taylors and Men’s Wearhouses announce what’s to come? It all depends on the closure of Covid-19 and at the moment we are far behind all other countries, with the exception of Brazil, in this effort. Then Darwin reigns until then.
Action Alerts PLUS, which Cramer co-manages as a charitable trust, has no position on the aforementioned shares.
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