ONLINE
RETAILERS STEALING CUSTOMERS
THAT IT'S A RESULT OF REAL
ESTATE PRICES GOING UP IN THEIR
RENTS GOING REALLY UP
WHAT YOU THINK.
>>WELL IT'S HARD TO SAY THAT
THEY WOULDN'T HAVE THE MONEY TO
PAY THE RENT IF THEY HAD A
ROBUST E-COMMERCE
EXPERIENCE AND WE'RE DOING WELL
DIGITALLY. THAT SAID THIS IS A
COMMON STORY FOR RETAILERS
RIGHT NOW REAL ESTATE IS
STRANGLING MANY RETAILERS IN
THE FIELD THAT'S NOT A QUESTION
WHERE IS DID SUFFER.
100% RAISE IN THEIR RENTS
FROM 15 TO $30 MILLION FOR
THEIR MADISON AVENUE LOCATION.
HOWEVER, THIS IS A PROBLEM WITH
THE LUXURY SECTOR IN
GENERAL NOT JUST THE BARNEYS
PROBLEM. ALL OF THE LUXURY
SECTOR IN TERMS OF BRICK AND
MORTAR RETAILERS ARE FREE RIGHT
NOW
OR IS IT SIMPLY THE MOST RECENT
VICTIM.
>>AND SO WITH THIS IN MIND WHAT
THIS IS REALLY SPELL OUT FOR
THE BROADER STATE OF RETAIL
RIGHT NOW, ESPECIALLY WHEN YOU
ARE RELYING ON SOME OF THESE
FOOTPRINTS THAT BARNEYS
NORDSTROM'S THEY'VE BEEN KNOWN
TO GO AFTER AND REALLY IF THEY
AREN'T PAYING OFF ON THE
REVENUE PER SQUARE FOOT.
WHAT DOES THAT MEAN WHAT COULD
THEY SHIFT TO IF YOU AREN'T C
THE SAME BANKRUPTCY OR
PROCEEDINGS AS BARNEY RIGHT NOW
THEN HOW COULD YOU KIND OF
MITIGATE YOURSELF FROM YOUR OWN
VULNERABILITY
IF YOU ARE ONE OF THE LOW MAJOR
PLAYERS.
>>WELL RETAILERS HAVE TO
RESOLVE REINVENT HIMSELF DAILY
IN ORDER TO SURVIVE THE MODERN
WORLD IS DONE VIA THAT 5 INCH
PIECE OF GLASS AND EVERYBODY
HOLD IN THEIR HAND EVERY
TRANSACTION IS GOING TO START
THERE IN THE FUTURE THAT
DOESN'T START THERE TODAY.
THAT'S JUST A FACT IT'S EASY TO
SAY THAT RETAILS IN TROUBLE
THAT THERE'S A RETAIL DOOMSDAY
THAT AMAZON IS JUST DURING
RETAIL, BUT ULTIMATELY IF YOU
LOOK AT THE MOST RECENT NUMBERS
RETAILS ACTUALLY DOING PRETTY
WELL RIGHT NOW CONSUMER
CONFIDENCE IS HIGH WAGES ARE
UP. WERE OF THE LOWEST
UNEMPLOYMENT IN PROBABLY 50
YEARS ON PAPER RETELLS DOING
PRETTY WELL EVEN THOUGH THERE
ARE STORE CLOSINGS IN I WOULD
ARGUE THAT RATHER THAN THE
RETAIL APOCALYPSE WHAT WE'RE
SEEING NOW IS IT A RETAIL
RENAISSANCE AND IN ORDER TO
HAVE A RENAISSANCE OF ANYTHING
YOU NEED TO TEAR DOWN THE OLD
TO MAKE ROOM FOR THE NEW AND AS
CONSUMERS CHANGE IN WHAT
THEY'RE BUYING BEHAVIORS ARE.
SO RETAILERS HAVE TO CHANGE AND
HOW THEY OFFER THOSE GOODS AND
SERVICES TO PEOPLE ORTIZ WAS A
LET'S GO IN AND SEE WHAT'S ON
THE RACK KIND OF BUSINESS
WHEREAS MOST PEOPLE WANT TO
LOOK AT THEIR PHONES AND SHARE
WHAT THEY WANT ONLINE.
RETAILERS NEED TO MOVE TO WHERE
THAT POP IS IN ORDER TO SUCCEED
SOME OF THEM ARE
DOING IT VERY WELL, SOME OF
THEM ARE STOPPED.
>>AND BARNEY SPECIFICALLY A
DIFFERENT BUSINESS MODEL RIGHT
THAN THAN MOST OTHER. LET'S SAY
THAT BOX RETAILERS ANY ANY
RETAILER REALLY.
IF YOU LOOK AT THERE THEIR
HISTORY. THIS IS NOT THE FIRST
TIME THEY FILED FOR BANKRUPTCY,
THE FIRST TIME WAS ACTUALLY
BACK IN 1996 IT CAME CLOSE
AGAIN IN 2012 WHAT IS IT
ABOUT BARNEY THAT MAKES IT
DIFFERENT THOUGH, AND LET'S SAY
A JC PENNEY THAT THIS ME LOOK
AT HOW MUCH.
THEY'RE OWED. AND YOU LOOK
AT US AND YOU KNOW A COMPANY
LIKE IS JOSH AMY THEY'VE GOT
2 MILLION THEY'RE OWED. GUCCI
ABOUT 2 MILLION AND YOU KNOW
FOR A COMPANY THAT'S ONLY
GETTING 800 MILLION IN SALES.
I MEAN IT SEEMS LIKE THEY'RE
JUST
NOT BALANCING THE INVENTORY,
CORRECT.
>>WE'LL CORRECT THE DEBT RATIOS
IS WHAT KILLS RETAILERS IF YOU
LOOK AT THE GAP THE GAP WAS
SUFFERING WITH THE BAT THAT
RATIO AND THAT'S WHY THEY'RE IN
THE TROUBLE THAT THEY ARE
GETTING AWFUL NAVY
INTO ITS OLD COME TO ITS OWN
COMPANY. IN TERMS OF BARNEYS
AND OTHER
LUXURY RETAILERS. THEY'RE
SUFFERING FROM A LACK OF INFLUX
OF CHINESE TOURISTS BUYING
LUXURY GOODS WHICH IS WHAT'S
BEEN DRIVING BRICK AND MORTAR
LUXURY IN THE UNITED STATES
SINCE 2015 OR SO.
DO THE TRAINING OR THIS NOW
GOING ON THE DEVALUATION OF THE
YUAN THIS MORNING UNITED STATES
LABELING CHINA AS A CURRENCY
MANIPULATOR WE'RE PROBABLY
GOING TO SEE LESS LUXURY
TOURISM IN THE UNITED STATES
OVER THE SHORT TERM WHICH WILL
PROBABLY SHIFT THE EUROPEANS
THAT AND TO YOUR POINT ABOUT
THE BANKRUPTCY BARNEYS
PREVIOUSLY THAT WAS A DISPUTE
WITH THEIR JAPANESE OWNER IN
1996 AND THEY'VE BEEN BOUGHT
AND SOLD SEVERAL TIMES OVER THE
COURSE OF THEIR HISTORY SINCE
THEN I SUSPECT SOMEONE WILL
PICK THEM UP THEY WON'T FADE
INTO OBSCURITY THE BRAND IS
SIMPLY TOO VALUABLE TO DO THAT.
BUT WHOEVER PICKS THEM UP
TO HAVE A DIGITAL STRATEGY TO
MAKE IT SUCCEED OR THEY'RE
GOING TO SUFFER THE SAME FATE
AS
THE CURRY PRIVATE EQUITY OWNERS
OF PARTIES IS NOW.
>>TRYING NEW TRENDS TO APPEAL
TO YOUNGER SHOPPERS SEA BREEZE
IN THE CAM KIND OF A SHOP IN
BEVERLY HILLS, I'VE CAST
DIGITAL FRONTS IS THIS TOO
LITTLE TOO LATE OR ARE THERE
SOME OF THESE EFFORTS THAT THEY
CAN STILL THROW OUT THERE
SEE WHAT STICKS WITH NEW
CONSUMERS.
>>SO BARNES HAS HAD ON MY
PRESENCE CALLED THE WINDOW FOR
SOME TIME,
THEY HAVE A PODCAST THAT THEY
RECENTLY LAUNCHED IT'S A LITTLE
TOO LATE FOR IS PROBABLY TO
PULL IT
OUT OF THE FIRE AT THIS STAGE.
THEY'RE GETTING SECURING
75 MILLION US DOLLARS I BELIEVE
TO PAY THEIR EMPLOYEES PAY
THEIR VENDORS THAT'S WHAT
DOUBLE OF WHAT THEIR RENT IS
THAT'S NOT A LONG-TERM SOLUTION
THERE HAVE TO BE FOCUSING ON
OTHER THINGS RATHER THAN POD
CAST AND DIGITAL STRATEGIES AT
THIS POINT YOU NEED TO GET
THEIR BUSINESS HEALTHY, HOWEVER
TO YOUR POINT THAT'S WHERE THE
LUXURY MARKET IS TODAY IS
SOCIAL IT IS WITH GENERATION Z
LATE-STAGE MILLENNIALS THAT'S
WHERE THESE PURCHASES ARE
COMING FROM AND RETAILERS LIKE
A NET IMPORTER
AND OTHER LEISURE ONLINE REAL
LUXURY RETAILERS THAT CAN TAP
INTO THAT ARE BEING SUCCESSFUL
AND THE NEIMAN MARCUS IS IN THE
LORD AND TAYLOR'S IN THE
NORDSTROM'S ARE NOT DOING THAT
AS
WELL AND THEY ARE SORRY FOR IT.
>>AND IT SEEMS LIKE IF THE
COMPANY DOESN'T FIND A BUYER
AND YOU
KNOW SUCCESSFULLY REORGANIZE
ITS DEBT. IT WILL LIKELY HAVE
TO LIVE WITH DAY AND WHAT DOES
THAT MEAN
IS IT A TOYS R US SITUATION AT
THAT POINT.
>>IT CERTAINLY COULD BE I WOULD
ARGUE IT WILL PROBABLY BE
DIFFICULT TO FIND A BUYER FOR
BARNEYS IF YOU ARE LOOKING AT
THE LANDSCAPE OF LUXURY
RETAILERS RIGHT NOW FOR A
SUCCESSFUL BRICK AND MORTAR
RETAILER. HE IS AN EXAMPLE TO
SAY THIS IS WHY I SHOULD BUY
BARNEYS YOU'D BE LOOKING FOR A
PRETTY LONG TIME IN THE MARKETS
HAS BEEN FOR SALE FOR 2 YEARS
WITHOUT A BUYER. SO LIQUIDATION
IS DEFINITELY AN OPTION ON THE
TABLE I HOPE THEY'LL BE ABLE
TO PULL IT OUT AND NOT HAVE
THAT HAPPEN. O F COURSE HAVE A
LOT OF FUN MEANS WITH A WEEKEND
OF PARTIES AND SO FORTH IT THAT
ACTUALLY DOES COME TO PASS, BUT