GLG News by Mr. Kenneth Leonard, Principal
GLG News is now G+ Insights
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G+ is a community for professionals, academics and entrepreneurs to connect through online discussions and in-person meetings. You will continue to see G+ Insights (formerly GLG News) here as well as on the G+ website, where you can share and discuss the G+ Insights you read.
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August 9, 2010
Developers To Hand Back Xanadu Project to Lenders | online.wsj.com
$2 & 1/2 Billion invested in one of the biggest white elephants in the history of the shopping center industry is now, in my humble opinion, worth approxamately $250 Million. What happens next?
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Don't Get Too Excited About the Latest From Sears
August 3, 2010
A recent article in the Orange County Examiner detailed the fact that Forever 21 had finalized a deal to lease (or sublease or License, it was not made clear) some 43,000 sq. ft. on three floors of the Sears store in South Coast Plaza. What are the obvious and less obvious implications of this new venture on SHLD's future profits?
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Alas, Poor Xanadu is No Longer With US
July 15, 2010
Xanadu, that $2 Billion + mixed use project in the Meadowlands of Northern New Jersey, has been renamed "The Meadowlands". Does this have any significance for the GLG Real Estate reader or investor? I think so.
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Chicago Anchor Report Is Worth Passing Along
June 24, 2010
A recent article in Retail Traffic Magazine basically reprints a recent survey by CB Richard Ellis examining the 48 retail anchor store leases signed in 2009 in the Chicago market . (Anchor stores are defined by CB as anything over 20,000 sq. ft.) I thought the findings were worth passing along to GLG News readers.
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June 15, 2010
An article in today's Crain's Chicago titled "Big suburban mall sold for fraction of debt" details the sale of a 1 million square foot mall called Charlestowne Mall and anchored by Sears, Carsons, Kohl's, Von Maur and a large Cinema. It was bought several years ago during the height of the bubble by Wilmorite with $42.7 million of debt. Replacement cost would approximate $130 million. They could not make the payments or get it refinanced and the banks took it back.
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May 31, 2010
An article in the 5/10/10 issue of Crain's Chicago Business about the inner working of a troubled new mall is worth bringing to the attention of GLG clients. It is most revealing in that it names names and shows the exact dollar amounts of the types of subsidies demanded by major retailers in today's marketplace.
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May 26, 2010
An article in last week's Washington Post about the "hidden value" of SHLD's real estate portfolio is one of the worst pieces of business journalism I have seen in a long time. Not only is it all wrong but it is written as if no research of past analysis has ever been done.
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Sears Is Following The Failed Montgomery Ward Strategy
April 27, 2010
Sears Web Site Sells Shuttered Stores | www.foxbusiness.com
This article from the Fox News network is a good example of what I have been predicting in this GLG "Blog" for the past two years. In retailing as in many other industries, certain companies are virtual "identical twins" simply because they do things in the same manner and appeal to the same customer at the same price points with indistinguishable products. That is the case with Sears and Montgomery Wards.
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April 13, 2010
Owner ready to fill Cincinnati Mall | cincinnati.bizjournals.com
This article about the much maligned 1.5 million sf. mall in Cincinnati is an interesting follow up to a commonly occurring circumstance in the shopping center industry.
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Blockbuster; All Things To All Customers, Not Much To Any
April 6, 2010
A recent interview on NPR radio by Blockbuster CEO Jim Keyes revealed that Blockbuster is pinning its survival on being the "only multi-chanel provider---in stores, by mail and by vending machines. This is a proven formula for failure.
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April 6, 2010
Stuck with Sears | www.businessweek.com
This BusinessWeek article is reasonably well researched but the writers are obviously not well versed in the retail industry. My analysis will provide some clarification that is sorely needed when understanding all the Lampert and Johnson "doublespeak".
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Glimcher Sells Two Of Their Best Malls
March 31, 2010
Glimcher Closes Joint Venture | retailtrafficmag.com
This article provides an excellent example of my major premise about the value of Malls and Mall REITS.It shows that quality "A" malls are still in demand and can command an "undiscounted" price at a very nice cap rate.
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Another Goofy Sears Brand Expansion Attempt
March 27, 2010
Sears Tries To Resurrect The Kenmore Brand | mcmillandoolittle.blogspot.com
This article from a blog by one of the leading Retail Consulting Firms in the country, talks about how Sears is trying to promote the Kenmore brand by opening a "Kenmore Store".
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An Overlooked But Important New Problem For Malls and Shopping Centers
March 22, 2010
Mall Stores Try To Shrink | blog.retailtrafficmag.com
This article in Friday's WSJ, although on the first page of the MARKETPLACE section, got very little play in the business news media. In my opinion it represents one of the most significant developments that will be impacting the value of Shopping Center and Mall REITs for many years to come.
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Simon-GGP Merger Creates Antitrust Issues.
March 19, 2010
Although much has been written about the economic pluses and minuses of this anticipated merger, little has been said about the very real threat of the FTC waking up and putting a stop to it.
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General Growth thinks its' Garbage is Golden
March 18, 2010
General Growth labels its' "bad" assets | www.chicagotribune.com
General Growth is a well run and successful company as I have said numerous times in this venue. However GGP, like all companies has made many mistakes and has acquired many under performing assets hidden within the package of good assets they bought from other companies. Some of these assets were good at the time they bought them but either turned "bad" thereafter or became "bad" because they overpaid for them.Now they want the public and their stakeholders to accept a $15.00 per share value for the package of under performing assets they have separated from their parent company as part of their propped recovery from bankruptcy.
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As Predicted, Blockbuster Is Busted
March 18, 2010
Blockbuster RaisesPossibility Of Bankruptcy; Stock Swoons | blogs.barrons.com
This article in Barrons simply confirms what I have been predicting in several previous GLG analysis. Why it took so long for this "horse and buggy" industry to realize it was doomed as soon as the success of Netflix and Redbox was assured and Hollywood Video and Movie Gallery died, will be the subject of this analysis.
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March 18, 2010
Retail exec: "There will be more mall foreclosures to come" | www.dailyherald.com
A poorly informed business reporter for the Daily Herald in Arlington, Va. writes about the foreclosure of a publicly subsidized shopping center known as Arlington Town Square. The writer then goes on to extrapolate this growing problem to shopping centers and malls throughout the country. This is just one more example of what I have been predicting is the flood of "the sky is falling" articles that could influence GLG clients if they are not better informed.
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February 22, 2010
Sears to Close 8 Stores | www.chicagobusiness.com
This brief article is rather deceptive in that it headlines 8 named stores that are closing but only briefly mentions the 13 Kmarts and 4 Sears Essentials that have also been announced. The article indicates that these 8 are but a portion of the previously announced closing of "underperforming Sears stores". This raises the question of what about the other 200 to 300 underperforming stores that Mr. Lampert announced intentions to close in 2008?
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February 10, 2010
Store Closings Could Keep Piling Up Throughout First Half of 2010 | retailtrafficmag.com
This article gives the reader a reasonable "heads up" about the consensus of industry thinking regarding estimated numbers of store closings for 2010. It does not give any actionable information that investors might find useful. I hope my analysis corrects this problem.
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