8 Companies You Use, That Will Close in 2017-SuperValu Inc.


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SuperValu Inc. may be one of the nation’s largest supermarket retailer and food distributor, but that does not make the company immune to plummeting numbers. While numbers increased for the month of November, reports in previous months left investors wondering what the future of SuperValu holds.

What is really behind the numbers is weakness in its gross margins. Reasons for this include lower fees under the Transition Service Agreements. SuperValu also shows a weakness in adjusted operating earnings from independent business. Higher employee related costs also played a part in the diminishing value of the retailer. On top of these points, lower vendor funding and contraction in margins from strong private brands also had a negative impact.

SuperValu Inc. thrives on the low cost of their products. However, one of the primary causes for decline include lower prices and higher advertising costs. There have been improvements to offset some of the damage, but other factors continue to lead in a decline in adjusted earnings from the segment.

The food distributor had to work through a strike as well. The Colorado distribution center further impacted the results of the reporting quarter. SuperValu was left hiring temporary workers and the company nor the union had any desire to step down.

The food retailer has been riding a steady period of decline with earning results and pressure to cut costs impacting the stock. Shares may look appealing, but the company is unable to return cash in the form of a dividend. It is likely they will continue to simply spend money chasing down a slowly dying business.

Yet SuperValu remains hopeful that it can still overcome the challenging environment that so many retailers are facing. There has been an increase in competition to hit the grocery industry leaving companies like SuperValu consistently facing the difficulty of producing growth.



8 Companies You Use, That Will Close in 2017-Elizabeth Arden


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It seems that artist branded perfumes have seen their heyday and Elizabeth Arden is no exception. It’s not just the lace of interest from consumers, but the amount of money that is invested into a star-studded perfume line. When the company announced their quarterly earnings result in February of 2016, it was rife with decline and missed the consensus on all fronts. The estimate of $0.60 per share was met with an apologetic $0.10 per share while revenue estimates came back over $28 million short causing investors worry in the disappointing results.

Elizabeth Arden may still have a fighting chance though as Revlon Inc. moves forward in acquiring the company for $419 million. However, this is a wager in and of itself to unit two aging cosmetic giants in hopes of reinvigorating both the brands. The risk is high as Revlon has admitted to the transaction representing a 50% premium over Elizabeth Arden’s closing price on shares. “The $14-a-share deal values Elizabeth Arden at about $870 million when the debt is included.

Billionaire Ron Perelman, who controls Revlon, knows that he is acquiring an unprofitable company whose celebrity fragrances have lost desire with consumers. Yet Perelman still sees an opportunity to revive the fortunes of the 106 year old Elizabeth Arden business. Revlon has been hanging on for 84 years and hopes that the combined distribution network as well as marketing strategies can broaden their appeal. “We see great opportunities for growth where they are strong and we are not,” stated Revlon CEO Fabian Garcia.

Revlon has had its own issues though and are pouring not only a lot of their own money into the merger, but that of investors who have been struggling with remaining patient. There were rumors that Revlon itself was to be bought out, but was put to rest when Garcia was named CEO after Lorenzo Delpani stepped down. Both companies have struggled with the shift to e-commerce as well, with Revlon having a small lead in that game.



8 Companies You Use, That Will Close in 2017-New York & Company


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This leading specialty retailer of fashion-oriented and moderately priced women’s apparel suffered some of their worst days in the last 8 years with reports of a wider than expected loss and decline in sales early in 2016. New York & Company is just one of the many stores who have fell victim to the preference of internet shopping over the brick and mortar shopping experience. Consumers are also more apt to buy items to spruce up their home rather than fill their closets these days making retail stores around the globe worried.

In March of 2016, New York & Co. lost 40% of their share value with a decline in revenue and same store sales. Chief Executive Gregory Scott said of the plunging numbers in earlier in the year, “We began the quarter with positive sales trends; however, as we entered the last week of March, we experienced a slow down in traffic to our brick-and-mortar stores, that continued into April, and led to sales and profitability below our expectations.”

Scott also added that the company’s e-commerce business and celebrity backed sub-brands did show sales growth, but that it was not enough to offset the negative traffic in the stores themselves. It also did not help offset the weakness in seasonal categories such as crops, shorts, T-Shirts and dresses.

Analysts seem to be giving up hope and one Eric Beder at Wunderlich Securities said “While we did not expect New York & Co. to be totally immune to the malaise that has affected the specialty retailing sector, we did believe the company’s supply chain streamlining program and strong results from Eva Mendes and Jennifer Hudson lines would have provided some protection; we were wrong, and, after waiting and waiting for the turn, are finally giving up and moving to the sidelines.”



8 Companies You Use, That Will Close in 2017-The Container Store


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The Container Store is among a group of companies that has had a long rise that may be met by a quick fall. Kip Tindell founded the company way back in 1978 and gradually built the business through 2013 when it finally became public with shares doubling in value shortly after. Unfortunately, sales momentum has slowed ever since 2010 and flattening out in 2014 and 2015. Tindell has since stepped down as CEO amid growing competition from other stores such as Wal-Mart and IKEA and e-retailers like Amazon.

It takes patience from the investor when a company is trying to turn itself around, but investors seem to be losing that patience and more after the financial fiscal reports. They are starting to lose hope of ever seeing The Container Store complete a successful restructuring of the business. Investors were optimistic so the net loss came as a shock while a decline in sales led many of the investors to throwing in the towel which then led to shares plummeting.

The Container Store has been struggling to get organized for some time leading to believe that the shock of the ugly bottom line should not have come as a surprise. By looking closer at the company’s results, challenges that the Container Store continues to face are red flagged. Stores that compare to the business were only up half of a percent year after year meaning there was minimal upward momentum in performance. Retail sales were up due to the opening of new stores yet The Container Store continues to argue that 2015 was an investment year in order to justify the losses.

The company has said that it has spent a mere pennies per share on key strategic initiatives that are designed to position it for greater success down the road. They said that they expect to see a large impact on that investment made in the coming years. Unfortunately, investors do not share in The Container Store’s optimism as they continue to lose patience with the retailer’s pace of its turnaround. Furthermore, they are becoming more and more uncertain whether they can get things fixed soon enough.



8 Companies You Use, That Will Close in 2017-Sears Holding Corporation


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Retail stores appear most frequently on lists of declining businesses, so it comes to no surprise that Sears is again at risk of disappearing in 2017. However, Sears has arguably fared the worst of the department stores since 2015. In April of 2016, it announced its plans to close down almost 70 K-Marts and 10 Sears stores over that summer. The decision was made after a slew of poor performances in quarterly earnings. In fact, sales have declined for the corporation every year since 2005.

This may come as a small surprise to some as Sears Holdings Corporation, the parent of Kmart and Sears, Roebuck and Co. touts to be the leading home appliance retailer in North America and a leader in sales for tools, lawn and garden, home electronics, and automotive repair and maintenance. They have a plethora of proprietary brands including Kenmore, Craftsman and Die Hard while offering a broad range of apparel lines such as Lands’ End, Jaclyn Smith and Joe Boxer.

In May of 2016, The Wall Street Journal looked into the revenue decline while reporting the company is looking to explore deals for the aforementioned key brands. It was also noted that the financial chief and long time lieutenant CEO, Edward Lampert would be leaving. Sears also said that Chief Financial Officer Robert Schriesheim is leaving the company to pursue other career paths but was staying on as an adviser until January. Schriesheim was one of the company’s longest serving executives joining in 2011 and had been a key lieutenant to Lampert during a series of financial maneuvers aimed at liquidating assets to keep the company above water.

Sears has struggled over the years to transform itself. They have invested in new technologies and services to better equip themselves for the digital age. It has also returned its focus to profitability with a focus on assortment, sourcing, pricing and inventory management practices sometimes being the cause of sale loss.