An Analysis of Free Trade

 

I’ve been sitting on this for a while trying to figure out whether or not offer it up.  It’s certainly not action sports or active outdoor focused.  And, in our current environment, it’s inevitably going to be perceived as having a particular bias.  I’d say it reaches a solid conclusion based on the data it utilizes.  If that’s a bias, so be it.

It’s a defense of free trade from the Fabius Maximus web site which I follow and highly recommend.  It’s conclusion, however, is based on actual data; not anecdotal evidence, not a one minute story on the nightly news, and certainly not a tweet.

Read more

Trade Shows, the Buy/Sell Cycle, and Changing Consumer Habits

Over the last months or maybe a year, I’ve watched the trade show discussion as dates have changed, unchanged, and we’ve all tried to figure out the role of trade shows.

We agree, I think, on the following:

  1. We need some trade shows
  2. Right now, there are too many
  3. Face time is a primary benefit
  4. It’s become harder to justify and time and expense of exhibiting or attending
  5. It’s been a long time since the shows were critical to order writing

The people at Emerald Expositions, who “…operate more than 50 trade shows, including 30 of the top 250 trade shows in the country…” and who bring us Outdoor Retailer, Interbike, and Surf Expo, are trying to adapt.  So is Reed Exhibitions, the owner of Agenda, that has “…a growing portfolio of over 500 events in 30 countries…” and SIA, whose show many of us will be off to next week.

I’ve been thinking that all the discussion about when the trade shows should be held was kind of missing the point- changing behavior from our consumers, who are pretty much in charge now, means an internal industry focus on trade show dates that match our production cycle requirements isn’t, well, completely in touch with reality.

I was going to write a really great article on trade shows, the buy sell cycle, and changing consumer habits.  But then somebody I know sent somebody else I know a just excellent article and he sent it to me.  It’s called “The Big Shift” by David Clucas.

On the one hand I was kind of disappointed because I was gearing up to say cogent, insightful things.  On the other hand, now I don’t have to write it, and I can still bask in the glow of David’s smartness by pointing you to it.

Two of my takeaways from David’s article are the changes that are going to have to happen (and are happening) in production and inventory management and the advantages that big companies have.  Those advantages include having less need to exhibit at trade show, though that doesn’t mean trade shows in some form aren’t important to them for other reasons.

Meanwhile, here’s a shorter article on a large mall in in the Pittsburgh area that just sold for $100.00  No, I didn’t leave out any zero.  The buyer, Wells Fargo, already owns the dirt under it.  It opened in 2005 (not great timing) and is about half occupied.  Expect to see more of this.

Some Waypoints in the Evolution of Retail

During the last couple of weeks, I’ve come across a number of articles that speak to the evolution of retail.  Here they are for your consideration in no particular order.

Read more

Why Did The Great Recession Happen?

Why Did The Great Recession Happen?

If you’ve ever looked at the suggested reading list on my web site, you know that I read some stuff that’s not related to business and certainly not to our industry.  Not directly that is.  But I think it helps me understand the environment we operate in and perhaps get a perspective I wouldn’t otherwise get.

William R. White is an economist who was recently awarded the apparently very prestigious Adam Smith prize.  He presented a lecture when he accepted the prize called, “Ultra Easy Money: Digging the Hole Deeper?”` Read more

Robots Invade Retail

I’ve stolen that title from the article I want you to read.  It’s of particular interest to me because I live in the Northwest.  More precisely, in Bellevue across the lake from Seattle.  As an aside, the really good thing about living in the great state of Washington (regardless of your political affiliation) during this presidential election is that everybody knows the state will go for Clinton, so we are not being bombarded with Trump and Clinton ads that insult our intelligence.

Especially in the western part of the state, we are pretty liberal.  Over in Seattle, they’ve passed legislation that will gradually raise the minimum wage to $15.00 an hour and they are working on, or have just passed, legislation that will give workers certain rights in how they are scheduled.

Read more

A Lesson from a Related Industry

I love golf.  That’s because I have an uncanny ability to only remember the good shots and to believe, in spite of all evidence to the contrary, that there’s no reason I shouldn’t play well next time.  This, of course, is one popular definition of insanity- but perhaps I should move on.

Read more

Some Perspective on GDP Growth

Here I go again- telling you stuff I think you need to know but that’s kind of unpleasant to hear.  I’d love to help you ignore it (come to think of it, I’d love to ignore it too), but it’s just not in my DNA.

Read more

Is Claire’s Stores Our Next Bankruptcy Candidate?

Teen focused jewelry and fashion accessory retailer Claire’s Stores has more than 2,800 stores in Europe and the U.S.  It was the “beneficiary” of a leveraged buyout (LBO) back in the giddy days of 2007.  The debt it acquired in that process, along with the over retailed, soft economy, online selling environment has pushed it to the edge.

The article I link you to below talks a little about the LBO process and how Claire’s private equity (PE) owners are now using the threat of a bankruptcy filing to try and negotiate itself out from under its debt.  Below that discussion is a list of retail chain bankruptcies in the last 12 months, and a brief explanation of their PE connections where they exist.  You’ll recognize most of the names on the list.

Ultimately, the decline in brick and mortar location is a necessary and appropriate reaction to market conditions.  In the short term, it’s hard if only because of the discounted inventory that’s thrown on the market.  It’s also hard on the poor shareholders who bought shares in some of these companies.

Here’s a text message I got a couple of days ago:

“My name is ************.  I am from Kazakhstan.  In ***********, 20**, I have invested all my savings into ********** at the average price of $*.**.  I was an owner of 73,500 ******** common stocks when in ********, 20**they claimed CH11 without any reimbursement for shareholders and until the stocks were finally delisted in *******, 20**, so I have lost all my money.  So, my question is: is there any chance to get any reimbursement from them?”

I had to tell him “no” and explain a little about U.S. bankruptcy laws.  His result gives some of you something in common with somebody in Kazakhstan, which you probably didn’t expect.  It’s also a reminder of investment rule number one:  Never put all your eggs in one basket.

It’s worth reading this article to understand how LBOs work for some of the PE community and why things go to hell if the cash doesn’t keep flowing.  It’s all about the balance sheet.  The list of bankruptcies also reminds you of the breadth of our consolidation.

Here’s the link.

Let’s Not Just Blame Amazon

The Amazon Effect is given a lot of blame for the lousy and, some say, deteriorating retail environment.  I gather it was a topic of conversation at the recently completed Surf Industry Summit at Cabo.

Read more

Online Advertising: Is the Bubble Bursting?

It has been an element of faith that the days of print advertising were ending and we’d all be making our advertising and promotion buys online.  I still expect print to be in a long term decline, but I just read a pretty persuasive article that talks about the decline of online advertising and the reasons for it.

Read more