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


Retail MAXIM


MAX-SI Spatial


G-400 Store



Latest Reports, Ratings, Productivity & Growth Indices 2016/Q3

G-400 Ratings ActionUpgrades-Downgrades 580 US & Foreign Credits & Divisions
2016/Q3 Gains-Losses in Fundamental Values of Business Model [as % of Total G-400 Watch List]

Management Fiscal Guidance 2016-17 Business Performance of G-400 Credits Independent of G-400 Ratings

G-400 Watch List Credit Quality Distribution of 580 US-Foreign Credits

G-400 Risk-Reward Matrix of Upside-Downside Potential. Fiscal Outlook 2016 for 580 US-Foreign Credits


Retail MAXIM July 2016
20th Annual MAXIM Store Productivity Survey of 800 Retailers & Brands, 1,880 B&M Formats, 104 Subsectors
Theme: “Power of One. Formats Maximizing Productivity Potential of Multichannel Retailing.”  Part I: Just the Metrics.
Metrics:   Productivity Series I: Sales per square foot metric by chain, sector and format by average format size, annual growth.  Productivity Series II:
Average store volumes, square footage ranges of all formats comprising store portfolio legacy core, derivatives & bridge, pilots & proposed formats, base supply expansion-contraction recession-recovery-inflection point. Time Series: 2008-16 annual 
Topics: + Highest productivity led by next generation B&M formats of consumer-centric & social media-entertainment platforms + Highest functioning productive formats possess evolutionary prowess  + Rightsizing revolves around bigger not smaller format footprint + Destination retailing global-digital age dictates format size & sales volumes + Real estate rationalization tests for highest & best use determining store capacity ripe for retention as retail, conversion to online warehousing & delivery or closings   + New strategies maximizing the multichannel model as Omni-channel format lags

Retail MAXIM June 2016
Ranking G-400 Department Store Credits for Sustainable Turnarounds and Real Reinventions
Theme: “J-Z Penny’s Turnaround Gets Jiggy. A New Riff on Department Store Drift. How to Reinvent a Middle Market Icon. 
Metrics: Operating and productivity data of restructuring & reinventing department stores under various stewardship [pre-Ron Johnson, under and post Johnson under Ellison, successful retail turnarounds.  Trajectory of dept. store G-400 Watch List Values 1998-2016  
Topics: + Reinventing the family department store model by reintroducing durable goods eliminated in 1970s + Diagramming a new higher caliber well-curated merchandising plan leveraging shopping voids of suburban middle & working class consumer  + Monetization of legacy brands unleashes inherent value & growth potential + Repurposing & rethinking function of dept. store real estate to support online warehouse & delivery models + New benchmarks & analytics testing highest & best use of B&M platform + Differentiation from the 1970s fashion category killer department store model now under siege + Reinvention of mass market model supporting America’s Great Mall Complex

Retail MAXIM May 2016
Ranking State of Turnarounds on G-400 Watch List   
Theme: “From Reinvention to Intervention. Restructurings That Lost Their Way unlike Those on a New Path” 
Metrics: Ranking of stage of turnarounds post 2013 inflection point & industrywide transition, cycle of fundamental values G-400 WL indicating widening-narrowing economic moat, breakout of business component values assessing weak links in restructuring, management fiscal guidance and risk-reward ratings assessing upside-downside potential, G-400 Corporate Governance Ratings System [CGRS] of public and privately-held retail [private equity firms to family & cooperatives]  
Topics: + Corporate DNA of restructuring dictates highly variable outcomes & sustainability + Structural forces rewriting industry rules & derailing turnarounds + New entertainment & social media platforms as new fashionistas undermining fashion & luxury brand sectors + Supply chain obsolescence aggravated by disruptive forces of “Amazon effect” colliding with “Anna Wintour effect” + “Anna Wintour effect” collapses industry structure & forces reinvention of luxury fashion sector + Retailers targeted by private equity buyouts and IPO recycling of businesses & assets caught in a perpetual turnaround cycle  + Collapse in traditional demand & replacement cycles depresses rates of sales growth & conversion + Impact of reinvented industries spawning new competitive risk + Event risk inherent in subpar corporate governance  

Retail MAXIM April 2016
Issue: Ranking 2016 Growth Prospects of G-400 Credits & Management Guidance on Same-Store Sales
Theme: “Flying over the No-Growth Zone. Mining the Middle Market Minefield for Moat”
Metrics: Internal growth [same-store sales] cycle of 2002-2016 vs. 2016 forecast for 580 G-400 retailers, e-commerce sales growth, external growth measures [store footprint, projected closing pipeline, M&A, alternative revenues], G-400 “Growth Prospects” ratings, G-400 Management Fiscal Guidance
Topics: + Reinvention of mass market model supporting 60% of US households economically disfranchised yields new growth among innovative G-400 retailers [Positive Watch]  + Systemic subpar internal growth of 2002 recovery turns sublinear in 2010 recovery with low prospects of reversing for huge swath of G-400 retailers + “Winners Take All Economy” of past 40 years widens disparity in wealth & household income to record and curbs consumption levels by half + Unfettered capitalism commoditizes everything from labor, good produced, assets and shopping experiences yielding subpar-sublinear growth + “Supply-on-Demand” construct [shopping ‘out of need not want’ and by event] symptomatic of malfunctioning economy, adopted by working class households in 2004 crosses over to affluent cohort depressing consumption across price point spectrum  + Structural attrition in store traffic since 1980s reaches single & double-digit rates in all retail sectors, price points & shopping center channels due confluence of dislocations [economic, online, competitive] + Catalysts of 2010-14 recovery [tourist consumption to renewed store expansion] derails with relapse in global economies + Systemic low growth triggers aggravated M&A and consolidation to achieve greater scale and growth potential + Absence of internal growth signs of late stage Asset Bubble Economy at tipping point similar to 2007-08 collapse

Retail MAXIM March 2016
Issue: Assessing the Impact of Private Equity on G-400 Credits Performance 2010-2016
Theme: “Private Lives Unhinged. Disruptive Dance of Public-to-Private Capital Trumps the Digital Transition”
Metrics: Trajectory of G-400 Watch List Competitive Advantage Values by private equity-owned retailers & IPOs by private equity firms, corporate ownership diagramed by private equity vs. publicly-held credits, operating margins, growth & return on capital data
Topics: + Destructive forces of escalating “private public equity dance’ [PtP] & shareholder activism eroding economic moat and sustainable entities + Mounting loss of confidence among PE firms evidenced by 2016 sell off of equity stakes & increasing inflows of shadow capital funding distressed credits + Real estate spin-offs and REITs of trouble retailers target of private equity buyout sunder Fed ZIRP polices inducing asset bubbles + G-400 corporate governance ratings are lowest for retailers owned by private equity and taken public by same group + Sources of retail disruption rooted in private equity buyouts & recycling of companies & assets elevating risk contagion [event, competitive, leasing] + High levels of real estate obsolescence and low four-wall productivity from systemic under investing in stores & high retention of non-integral assets + Financial-centric models of private equity trump consumer centric elevating speculative growth & unstable business + Digital innovation blunts asset deflation + Recapitalization stabilizes cash flows to cover private equity hefty dividend payouts & fees

Retail MAXIM February 2016
Issue: 2016 Update of G-400 Corporate Governance Ratings System
Theme: “This is Spinal Tap. Boards as the Backbone that Make or Break a Retailer”  
Metrics: Corporate Governance Ratings System [CGRS] scoring caliber of management and Boards of Directors for each 580 G-400 WL credits, gains & losses in G-400 advantages as a function of caliber of corporate governance ratings  
Topics: + Corporate Boards are retailers’ first defense in a roiling marketplace and key to a sustainable transition & turnaround + Highest caliber, diverse & visionary G-400 Boards are also the top rated G-400 credits positing greatest gains in economic moat + Top rated G-400 Boards support consumer-centric models + Low-rated G-400 Boards support “shareholder-centric” models dictated by “tyranny of short-termism’  + Sustainable versus speculative businesses a function of ‘consumer-centric” & “shareholder-centric” models set by culture of Boards + Qualifying competitive advantage of retailer based on caliber of Board and capital allocation policies + Boards seated by hedge funds & private equity firms invite predatory buyouts & short-termism

Retail MAXIM January 2016
Issue: Ranking the Real Estate Advantage of G-400 Credits for Monetization & Liquidation Potential
Theme: “Fight Club. A Real Estate-Led Restructuring Hampered by the Exclusionary Rezoning of American”
Metrics: G-400 Business Component Values breakout rated by real estate monetization potential over past three cycles and future cycles, G-400 Real Estate Value rankings identify potential liquidation situations distribution of G-400 retailers by credit quality, market niche, price point & sector
Topics: + Rezoning of America underway by Congress, State & urban governments resetting land use policies and real estate valuations, marginalizing middle and working class shopping destinations + Monopolistic positions of REITs and high density markets and inflated rents and property values reinforced by rezoning changes type of store formats & B&M feasibility + Higher rent districts attract corporate monopolies and inflate land prices [as seen w/ Google]  + Rezoning outgrowth of unfettered capitalism commoditizes retail limiting monetization potential + Urbanization and global gateway cities embrace exclusionary zoning to redevelop shopping and eateries for the Uber-wealthy and spendthrift tourist at expense of mass market resident households + Rezoning & redistricting aggregates higher purchasing power forcing retailers to consolidate store portfolios into higher density, higher income, higher rent locations and markets + Future pipeline of turnarounds and store liquidations building as rezoning sets new location criteria marginalizing future sales potential of existing retail + Monetization potential of real estate trigger rebranding and new merchandising platforms seeking exclusionary-zoned sites to generate growth, productivity and high returns lacking in emerging marginal sites + “Superpower” predatory strategies of US and urban government fostering aggressive expansive strategies and larger footprints affordable by only a finite group of high producing retail that overtime commoditizes the shopping experience + Real estate capital markets and hedge fund rent-seeking strategies redefining retail real estate values and land use [see Seritage REIT spin off of Sears]+ Rezoning movement will dislocate the past 60 years of suburbanization, wealth and middle class, generating a pipeline of dark assets [stores to shopping centers] + Rezoning sets new higher hurdles in turnarounds for US retailers whose merchandising models and customers are concentrated outside the new epicenters fo wealth & commerce + Great American Suburban shopping Center Complex is under siege as rezoning destroys real estate values