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Inside Retail (Apr 26th, 2017)

Retailers are struggling with consumer shifts to online shopping and the sector’s employees are feeling the pinch, according to a recent Bank of America analysis. The changing retail sector will likely create a “structural shift in the supply and demand for labor,” Bank of America analyst Joseph Song wrote in a Liquid Insight report April 21. Total retail positions shrank by 61,000 in February and March after “decent hiring activity” in December and January. Now, retailers are on track to close more stores this year than at the height of the Great Recession in 2008, according to a Credit Suisse tally. Displaced retail workers are turning primarily to the restaurant industry for alternative employment. – FINANCIAL TIMES

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Luxury shoe company Jimmy Choo PLC has put itself up for sale. The London-based company said no buyers have come forward yet. A pair of Jimmy Choo shoes can easily top $1,000, but today's buyers are veering toward discounts and online price-comparison shopping, even in the luxury niche. Jimmy Choo said its majority shareholder, JAB Luxury, which holds 68 percent of the company, supports the plan. The shoe retailer has a fairly stable business and the announcement it was up for sale surprised the Street. Jimmy Choo said it is also reviewing alternative strategic options. – CNN

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S&P Global Market Intelligence has named 10 companies that are in danger of bankruptcy at a time when retail bankruptcies are on track to top the number of filings at the height of the Great Recession in 2008. So far this year, 14 retailers have gone bankrupt, including Wet Seal, The Limited LLC and Payless Shoes. The next retailers filing Chapter 11 could be: Sears Holdings Corp.; DGSE Companies Inc.; Appliance Recycling Center of America Inc.; The Bon-Ton Stores Inc.; Bebe Stores Inc.; Destination XL Group Inc.; Perfumania Holdings Inc.; Fenix Parts Inc.; Tailored Brands Inc.; and Sears Hometown and Outlet Stores Inc. – WSJ

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Nike Inc. scored a patent for “architecturally reinforced denim” that may interest extreme sports athletes like BMX racers and skateboarders. The proprietary fabric could be more elastic than traditional denim and have moisture-wicking capabilities, Nike said in its patent filing. “While denim is a relatively tough and durable fabric, conventional denim lacks the resilience and other performance and/or comfort characteristics desired for athletic endeavors particularly in extreme sports,” Nike said. The patent could be part of a move from Nike responding to a consumer shift in preferences away from athletic wear toward blue jeans and causal shoes. – BARRON’S  

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J.Crew Group Inc. said it will cut 250 positions, including 150 full-time employees and 100 open jobs, the majority of which are with the company’s corporate headquarters. The mall-based retailer is battling sales declines as foot traffic to stores is waning. The company expects to take a $10 million charge in its fiscal first quarter because it has to pay for severance packages and other expenses related to the cuts. “While challenging, we know this needs to be done and this is a critical step to position J.Crew for the future,” CEO Millard Drexler said in a statement. – WSJ

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Costco Wholesale Corp. (COST) is dishing out a special cash dividend of $7 per share to its shareholders in a rare move among retailers in recent years. The total payout amounts to $3.1 billion and will be primarily funded through borrowings, Costco said. Shares were up about 3 percent in Wednesday’s session on the news. The wholesale retailer also increased its regular quarterly dividend by five percent to 50 cents a share. “Our strong balance sheet and favorable access to credit markets allow us to provide shareholders with this,” said Richard Galanti, CFO and executive vice president. – BLOOMBERG

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