Retail
MAXIM.net
Alternative Retail Real Estate Risk Analytics for Alternative Capital
Benchmarking Risk and Opportunity of Structural Change in the Retail Credit and Spatial Markets
Global 400 Retail
Watch List
Sample
Retail MAXIM
Sample
MAX-SI Spatial
Index
Sample
G-400 Store
Productivity
Survey
Sample
G-400 ALERT
- Retailer recovery as uneven as economy: G-400 WL composite value struggles to advance from weight of inefficient models
- Ratings actions downgrades for 199 US-based formats (2013 values relative to 2012).
- Ratings actions neutral for 87 US-based credits (20% of US Watch List)
- Upside distribution: Moderate gains short-term: 2013: 14% of US G-400 WL. Low gains: 54%. None: 32
- Risk distribution: Downside potential short-term 2013: 37% of US G-400 WL. Moderate 53%.
- Strongest of Five Business Pillars: Real Estate Asset Advantage possessed by 58% of Watch List. LTM gains had by 36% of credits
- Weakest of Five Business Pillars: Operating Platform & Productivity--40% of formats support broken bs models & inefficient supply chains
- Radical Reinvention (overhaul of supply chain & operating model) underway by 25% of G-400 WL. LTM: 38 formats sustained gains since 2010(RM: April 2013)
- ‘New Standard Model’ of Retail’s Reinvention: 60 G-400 WL formats as case study (RM: April 2013)
- Restructuring situations comprise 30% of Watch List. LTM: 30% advanced vs. 43% deteriorated. 2013 vs. 2010 values:
- Distressed Formats vs. Viable: 30% of 455 US G-400 WL dependent on external funding vs. 40% self-sustaining-cash flow regenerative models
- Junk Retail Exit Strategy: 2013 IPO pipeline & private equity M&A cycle serve as alternative to bankruptcy & real estate liquidation
in CONTEXT
Retail MAXIM
- In Defiance of Amazon: Preliminary store productivity data reveals second consecutive year of increasing four-wall sales under bigger format footprints (See forthcoming MAXIM July 2013 survey of 530 formats)
- JC Penney Debacle: How property punters got wrong the go-dark risk at the mall(RM: April 2013)
- Real Estate without Borders: “Perfect asset correlation” storm in a channel agnostic age. The leveling of shopping center landscape by 3rd generation of destination retail. Trade-offs in leasing risk & asset valuations (RM: May 2013)
- Suburban Mall Extreme Makeover: Evolution as power center circa 1980s alters asset economics & dynamics. (“Real Estate without Borders.” RM: May 2013)
- Value Retail’s New Face in 2nd Aught: Seven big box chains leading reinvention of fashion (cheap chic & dept stores) and durable goods (category killers)(RM: May 2013)
- New Global Mass Market: Reviving Mass-Class model circa 1990 (convergence of hi-brow & low-brow retail) levels shopping center landscape. (RM: May 2013)
- Beyond Dunkin’ Doughnuts: Fast food franchising as real estate vehicle for US fashion brands & mall chains accelerating global expansion
- Breakdown of America’s Great Shopping Complex: Ten retailers breaking free from constraints of the 70-year old chain store model & infrastructure (RM: April 2013)
- Metric Manifesto: Six structural issues widening data divide gap impeding vertical integration of retail & real estate under omni-channel paradigm (RM: April 2013)
- MAXIM’s 24 New Normals increasingly embraced by retail CEOs on G-400 WL to reinvent B&M model (RM: Nov 2011)
MAX-SI Spatial Index
Supply Trends
- RESET VI 2009-2013: Reinvention of the conventional store format next stage of real estate rationalization
- Retailers still “going rogue with real estate.” (RM: 1/13) B&M footprint expands by double-digit in increase in new store pipelines
- New Supply pipeline levels remain above 2009 low despite modest leveling off from scarcity of prime locations (MAX-SI Q1 2013)
- Store closings trending below liquidation levels of value destruction. Distressed credits continue to defer portfolio rationalization.
- Big Box resurgence: 20 chains expanding the “bigger is better” B&M footprint (Debunking industry myth of small format trend defining the millennium)
- Real Estate without Borders: Era of agnostic retailer-consumer levels shopping center playing field of asset classes (Exploiting The Mills model circa 1988)
- Meaningless comp sales metrics in the Big Data era: Smoothing of B&M channel with online distorts profitability by channel (RM: April 2013)
- Bricks & Mortar “Pure Play” Sales Comp Index stuck at unprofitable growth levels
- Omni-Sales Comps Q1 lags two-year trend, no lift to internal growth of B&M space
- Retailer comp guidance for 2013 lowered in Q1 to recessionary levels (MAX-SI Spatial Index Q1 2013)
- Factory outlet sales comps turn negative for prestige brands and distressed chains as predicted in MAXIM’s 2010 update on risks of asset class
- Extreme value formats taxed: Sequestration impacts channels shopped by lower rung of America’s muddled middle class
- Data Distortion: ICSC-Goldman Chains Store Sales Index continues to overstate sector profitability by 100-1500 bps
- Shopping-on-Demand (SOD) out of need and replacement cycle dictates consumer spending behavior for eight straight year, reinforced by New Normal of Sequestration of austerity and rising cost-of-living
- Bricks & mortar space rolled out 60 new concepts in Q1 2013 vs. 110 in Q1 2012
- Debut of the “Omni-Store:” Four variations on the “Smart Store” model. Showrooming use--a mere footnote
- Five New OMNI-store format redefines demand for suburban mall space
- In-store real estate monetization account for 10% of new pipeline driven by big boxes expanding in-store concepts to new brands
- Reinventing lifestyle retail: New generation High functioning formats by m-commerce and luxury brands
- Doubling the Innovation Dividend: New product introductions boom by restructuring credits leverage B&M square footage capacity
- Amazon shopping center convergence expands category portfolio
