Retail (Stream of Consciousness)

Some of you commented that we've been spending too much time on retail. Gee...wonder why that might be. ICYMI, here is this week's carnage: 

  • Busted Narratives. H&M, the world's second largest clothing group, reported earnings earlier this week and the stock took a solid tumble. Why? Declining sales at its brick-and-mortar spots. Shocking. Profit fell by 33% and disappointing sales meant massive discounting and guidance was that discounting will persist through Q1 '18. The company intends to shut 170 underperforming stores but, given its aggressive expansion plans, that translates to a net addition of 220 stores, down from 388. Choice bit"H&M finished the year with net debt on its balance sheet rather than net cash for the first time in more than 20 years." Hmmm. There goes that "fast fashion" is killing apparel retails narrative.
  • MusicGibson Brands paid a $16.6mm coupon payment to holders of its $375mm 8.875% senior secured noted due 2018. They must be feeling pretty good about those holiday numbers. 
  • Regis Corporation ($RGS). The large owner, operator and franchisor of hair salons (i.e., Supercuts) reported that it (i) decided to sell and subsequently franchise substantially all of its mall-based salon business in North America, representing 858 salons, and (ii) committed to close 597 salons. The company CEO is Hugh Sawyerof Huron Consulting Group and an experienced player in operational restructurings, having been involved in Energy Future Competitive Holdings Company LLC and Edison Mission Energy.