Retail's shift from sticks & bricks to e-commerce has been devastating for companies that did not convert fast enough. Oddly enough - for survivors of the transition - it couldn't have come at a better time as COVID-19 has forced retailers to rely almost exclusively on web-driven sales.
Meanwhile, researchers at UBS noted that the Pandemic could alter consumer behaviors permanently - leading to the closure of 100,000 retail locations by 2025 - as customers opt for online shopping.
Last week the U.S. Census Bureau published a report showing that retail sales (including online sales) fell by 8.7% between February & March.
Neiman Marcus has 43 retail stores and could declare bankruptcy after COVID-19 forced the retailer to close all of its stores and furlough its 14,000+ employees.
Last week, Neiman Marcus was unable to make ANY scheduled debt payments which could put them in default.
Marcus & Millichap estimates that some landlords & mall owners have collected just 15%-30% of April rents. Many landlords are working to negotiate with lenders to avoid their own defaults.
According to Trepp, roughly 11% of CMBS retail property borrowers (~$13B) have missed April payments.