Liquidation Industry News Feed

Macy's plans to triple Backstage store count

According to an article on CNBC.com written by Krystina Gustafson today, Macy's plans to roll out another 30 Backstage shops within Macy's stores this year.  These will be in addition to the existing 15 stores opened last year.  This is a pretty smart and interesting strategic move by Macy's to leverage what might be their best asset, their locations.  Mall owners should love this, assuming the stores perform.

Most of the other off-price retailers, like TJ Maxx and Ross are located in open-air shopping centers rather in malls.  They have been performing very well since the Great Recession, providing yet another reason for consumers to avoid malls.  According to the article, roughly 2/3rds of Macy's customers spend monty at the off-price chains, so these in-store, off-price shops should draw shoppers back into the malls and the stores, specifically.

I have not been in a Backstage store yet.  It will be interesting to see what product is sold there.  Will it be product that would have otherwise been sent to liquidation--like returned merchandise?  Or will it be 'made for the outlet' product like so many outlet stores do today?  

Time will tell what impact this has on the opportunity to buy liquidation inventory from Macy's going forward.


Macy's Troubles Continue - Impact on Liquidation Inventory Uncertain

Macy's comparable store sales fell 2.1% in November and December, according to its latest earnings release.  The company said it will be closing 68 stores.  These closings are part of the previously announced 100 stores closings.  With some additional restructuring, the total impact on employees will be a reduction of more than 10,000 jobs.  The move is expected to save the company $550 million per year.

There is a decent chance that the store reductions will create a short term bump in liquidation volume, but that is not certain. The company may move inventory to other nearby stores or sell it onsite in closing sales.

Longer term, the continued reduction in revenue will mean a reduction in returned inventory.  Customers can't return what they don't buy.  We will see how things develop, but if they are not able to successfully drive the shift to online fast enough to make up for shrinking revenue in stores, the company will be in for additional pain--store closures and job losses.


Macy's Closing 100 Stores

As reported today in Commercial Property Executive, Macy's will be closing 100 stores, or roughly 15% of its properties, in 2017.  The company says it will be focussing on better performing stores and strengthening its online presence.  Macy's shares have fallen more than 40% in the past 12 months and profits have all but evaporated.

The impact this will have on inventory liquidation volumes remains unclear.  Inventory may be shifted to other stores rather than liquidated in place, but it would be wise to keep an eye on this.  Once the locations of the closing stores are made public, there may be some local opportunities to purchase product coming out of them.

 


Liquidation of furniture from the Olympic Village in Rio

This is interesting.  You can now visit https://events.bstock.com and bid on the furniture and other fixtures being used at the Rio Olympics in the athletes' apartments!

There are 31 towers that will house around 18,000 athletes, coaches, trainers, etc.  Each of these apartments is furnished with the basic necessities (beds, couches, chairs, tables, wardrobes, etc.).  All of this furniture will be sold and moved out of the village immediately after the Olympics ends.  Well, you can bid on and purchase, in container load quantities, any of this stuff you like!

In addition to apartment furniture, they are selling crowd  control barriers, lockers, and other random assets.

This is a slightly different marketplace for the B-Stock Sourcing Network, since it is not selling inventory for a retailer or manufacturer, but for secondary market buyers, it represents a great opportunity nonetheless.  Check it out and get a piece of the Rio Olympic Games!


Macy's Continues to Struggle

A weakness in consumer demand for apparel and the shift to online retail are hitting Macy's hard.  The company has just slashed their sales forecasts on the heels of a drop in comp store sales of 5.6% in Q1.  This was the 5th consecutive quarter of declining comp store sales for Macy's.

According to the Wall Street Journal's Suzanne Kapner, "Discount chains like T.J. Maxx and fast-fashion retailers such as H&M Hennes & Mauritz AB that can offer jeans as cheap as $17 and polo shirts for $10 are stealing foot traffic and hurting demand for the $50 jeans and $80 polo shirts that Macy’s sells."

The great news is that there is a significant push among consumers for value.  This is where the secondary market shines.  The bad news for Macy's is that their primary business will continue to suffer.

It is very likely that we will be seeing a flood of Macy's excess in the secondary market over this next quarter, so keep an eye on sites like BStockSupply.com to find some deals.


More inventory returns coming as retail sales continue to shift online

According to the US Commerce Department, online retail sales grew to $341.7 billion in 2015. This was 14.6% growth over the prior year. What is particularly interesting is that total retail sales grew only 1.4% over that same period (excluding food sales).

So once again, ecommerce has gained share of total retail sales. In 2015 it represented 7.3% vs. 6.4% the prior year.

If you exclude automobiles and fuel sales, the implication is that e-commerce generated ALL retail sales growth in the year. Pretty shocking implications for brick and mortar retail.

Of course, for the liquidation industry, this is great news. As you probably know, e-commerce sales typically experience higher return rates than brick and mortar sales, in some cases double or more. This means increasing amounts of product available to the secondary market.

Other good news for secondary market buyers is that e-commerce returns are typically considered higher quality than store returns. Perhaps this is because e-commerce returns are often sent back immediately (before using the product) when the buyer realizes they made a buying mistake. These products are also handled less than returns in stores that then have to be centralized back at the returns distribution center.

All-in-all, this is great news for secondary market liquidation buyers of returns and excess inventory. The only bad news here is for anyone who operates a vast network of retail stores. Figuring out how to keep shoppers coming in to see you is becoming more and more important.


Inventory Buildup Continues in Q3

According to the Commerce Department report released today, businesses accumulated another $90 billion worth of inventory in the third quarter.  This is an upward revision of the $56.8 billion reported last month.  Over the prior two quarters the total increase is over $100 billion.

This just heightens the importance of this holiday season to retailers and manufacturers.  If consumer spending doesn't materialize as planned, the amount of excess inventory that will be available in the secondary market could be truly epic.  Of course, if spending DOES materialize, the amount of customer returns we will see in January and February will also be off the charts.

Either way, secondary market players are poised for a great few months.  Hopefully, you have been heeding our advice to begin accumulating capital to be prepared to make some major buys this season.  After all, money is made in the secondary market when you buy, not when you sell.  If you can be buying at times of swollen supply you will get better deals and make more money (since the prices to end consumers will be little changed).


Inventory buildup at retailers heading into the holdays

In this article in the International Business Times by Avaneesh Pandey, she points out how inventory levels are rising heading into the critical holiday shopping period.  Just in Q3 in fact, she says that inventory levels at American businesses have grown by $56.8 billion.  She goes on to quote a Macquarie Research report suggesting specialty stores and apparel companies are currently experiencing “a build-up in inventories beyond the natural increase ahead of the holidays”.  The same report also named 10 companies where inventory is growing faster than sales, including Lululemon Athletica, Nike Inc., Under Armour Inc. and VF Corp.

This situation will have very positive implications for consumers this holiday, as the markdowns are likely to happen early and be deep.  Beyond that, if consumers don't show up with their wallets open this holiday season, we are going to see a tidal wave of product hitting the secondary market at year end and in early January.

Starting accumulating capital now so you are in position to take advantage of these upcoming buying opportunities.


B-Stock Solutions launches Woot liquidation marketplace

It looks like B-Stock has launched a great new site for liquidation buyers this past week.  Woot.com, the original 'deal of the day' site (now owned by Amazon), is their newest customer.  The site looks great and appears to be selling brand new Amazon excess inventory in liquidation loads.

I highly recommend checking this one out.

https://woot.bstocksolutions.com


B-Stock Solutions launches 2 new liquidation marketplaces

It looks like two more great sourcing opportunities have launched on the B-Stock Sourcing Network. The two new sites are Groupon Goods in the UK and Destination Maternity in the US.

The GrouponGoods marketplace is selling returns and other excess inventory that is all located in Europe, so it will be best for buyers over there.  Destination Maternity, on the other hand, is all located in the US.  However, the rules of the site state that all merchandise must be exported to a market outside of the US, Canada, and Mexico.

Here are links to the sites:

Groupon Goods Liquidation Auctions