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Yesterday, the Wall Street Journal and NY Times reported that discount retailer Steve & Barry's was facing bankruptcy. The chain had boasted how it took undesirable real estate and survived on very small margins to offer good quality, trendy clothing at low prices. Sarah Jessica Parker's lawyer said his client, who created a line of clothing for the company, was "surprised and disappointed" given how strong S&B's accounting statements were, but the WSJ noted this: "People close to the company’s finances say most of the retailer’s earnings came in the form of one-time so-called tenant improvement payments from landlords of $2 million to $7 million per new store."
Did $8.98 Dresses Do Steve & Barry's In?
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Someone needs to go to art school - that is not a great picture in any way artistically or technical
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TI cannot be constituted as revenue. I mean, unless it can.
Oh and they had the best broker in the world to get that kind of money.
what will venus williams and starbury do?
private equities, take notice!
So selling clothing was basically a sham so they could collect the tenant improvement payments? this is the equivalent of taking in orphans so they can get the government check.
Sears Holdings is running the same "scam". Since the value of their real estate holdings, including K-Marts, is far greater than the value of their retail business, they have leveraged those values to support their stock price while maintaining their stores as a defensive hedge against a lousy commercial real estate market. It's an equity play and investors are bidding on chips that can be called in, not sales of bras and duct tape.
Wait, $9 dollar dresses are not profitable? What is this world coming to?!!