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Retail Sector Enjoys Best Holiday Season In 6 Years As Shoppers Spend Up A Storm

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Despite stock market fluctuations, a partial government shutdown and growing concerns over potentially slowing global growth, consumers in the U.S. reportedly opened their wallets with abandon this holiday season.

MasterCard SpendingPulse, which tracks spending both in stores and online, announced on Wednesday that U.S. consumers had spent more than $850 billion between Nov. 1 and Dec. 24 this year ― an increase of about 5 percent compared to 2017.

MasterCard said it was the best holiday season for retail in at least six years.

“From shopping aisles to online carts, consumer confidence translated into holiday cheer for retail,” Steve Sadove, a MasterCard senior advisor, said in a statement. “By combining the right inventory with the right mix of online versus in-store, many retailers were able to give consumers what they wanted via the right shopping channels.”

The holiday sales spurt was unevenly distributed across different sectors in the industry. Apparel and home improvement saw significant growth (about 8 percent and 9 percent respectively), MasterCard said. And online shopping enjoyed a huge boost, growing 19 percent compared to 2017.

E-commerce giant Amazon was a clear winner in the online space. The company took 81 percent of internet sales between Dec. 1 and Dec. 19 against other big-box retailers, CNBC reported citing Edison Trends data. 

Amazon announced on Wednesday that it had a “record-breaking” holiday season. The company didn’t reveal revenue numbers or sales figures but said it had shipped more than 1 billion items for free in the United States with its Prime service over the holiday season and had sold millions of Amazon devices like the Echo and Fire TV Stick 4K.

According to MasterCard, department stores experienced an overall decline of about 1.3 percent in holiday sales from 2017. Electronics and appliances also saw a sales dip of about 0.7 percent. 

While it was a very strong holiday season overall for retailers, some analysts warned that the retail surge may stall in 2019 as concerns continue to brew on Wall Street over a potentially slowing economy. Rising costs due to tariffs and other factors could also weigh down retailers, Neil Saunders of research firm GlobalData Retail told the Los Angeles Times this week. 

“The main question now is, can retailers keep this performance going as we move into 2019?” Saunders said. “Investors are very nervous about the prospects, which is why retail stocks have taken a bit of a beating.”



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Gymboree Files For Bankruptcy For The Second Time In Almost 2 Years

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Jan 17 (Reuters) – Children’s clothing retailer Gymboree Group Inc filed for Chapter 11 bankruptcy protection, the second time in almost two years, and said on Wednesday it will close more than 800 Gymboree and Crazy 8 stores.

The San Francisco-based company said it will also sell its high-end line, Janie and Jack, as well as its intellectual property and online platform.

The company’s Canadian arm, Gymboree Inc, also intends to seek bankruptcy protection, it said.

Gymboree is the second U.S. retailer to file for bankruptcy on Wednesday. Earlier, Shopko Stores, a general merchandise store operator, filed a voluntary petition in Nebraska.

More than 20 U.S. retailers, including Gymboree, Sears Holdings Corp and Toys R US, have filed for bankruptcy since the start


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More than 20 U.S. retailers, including Gymboree, Sears Holdings Corp and Toys R US, have filed for bankruptcy since the start of 2017.

More than 20 U.S. retailers, including Sears Holdings Corp and Toys R US, filed for bankruptcy since the start of 2017, succumbing to the onslaught of fierce e-commerce competition from companies like Amazon Inc.

Gymboree, which started making children’s clothing more than 30 years ago, operates about 540 Gymboree stores and outlets in the United States and Canada. It also has about 265 stores across the United States under the ‘Crazy 8’ brand and 139 shops under ‘Janie and Jack’.

Gymboree Group listed assets in the range of $100 million to $500 million and liabilities of $50 million to $100 million, its court filing showed.

Gymboree earlier filed for bankruptcy protection in June 2017 and was one of the few brick-and-mortar retailers that managed to escape liquidation in a wave of bankruptcies that swept the sector.

The company said it signed an asset purchase deal with Special Situations Investing Group Inc (SSIG), an affiliate of Goldman Sachs & Co LLC, and SSIG will serve as the so-called “stalking-horse” bidder in the sale of Janie and Jack.

Gymboree has received a commitment for $30 million debtor-in-possession financing from Goldman Sachs Specialty Lending Holdings Inc and SSIG.

Gymboree, including all its U.S. subsidiaries, filed the petition in the U.S. Bankruptcy Court for the Eastern District of Virginia, it said. Its Canadian arm also intends to seek bankruptcy protection in the Ontario Superior Court of Justice. 

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California Utility Tied To Devastating Wildfires To File For Bankruptcy

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Pacific Gas and Electric, the power company blamed for sparking several devastating wildfires in California in recent years, announced Monday it will file for bankruptcy later this month.

The company is facing billions of dollars in claims related to November’s Camp fire, which destroyed nearly 19,000 structures and killed at least 86 people, as well as several infernos in 2017.

The Camp fire, which obliterated the town of Paradise, is the deadliest and most destructive wildfire in California’s history and was the costliest natural disaster worldwide in 2018. The cause of the blaze is still under investigation, but CNN reported last month it is believed to have started when a PG&E power line came in contact with tree branches.

An attorney representing victims of the fire said there’s “pretty overwhelming” evidence that the utility is at fault, CNBC reported in November.

In October 2017, a series of wind-driven wildfires, aptly named the Northern California “firestorm,” ripped through several counties. Investigators with the California Department of Forestry and Fire Protection later determined that a dozen of those blazes were started by PG&E equipment and power lines, and that in eight of those cases the company was in violation of state laws concerning maintenance and brush clearing.

PG&E faces at least $30 billion in liabilities from damage during the 2017 and 2018 wildfire seasons. And its stock has plummeted, down 88 percent from late 2017.

The utility plans to file for Chapter 11 bankruptcy around Jan. 29. The announcement comes one day after the resignation of company CEO 

“The people affected by the devastating Northern California wildfires are our customers, our neighbors and our friends, and we understand the profound impact the fires have had on our communities and the need for PG&E to continue enhancing our wildfire mitigation efforts,” interim CEO John Simon said in a statement Monday. “We remain committed to helping them through the recovery and rebuilding process.”

Simon said that a court-supervised bankruptcy “will best enable PG&E to resolve its potential liabilities in an orderly, fair and expeditious fashion.”

Newly inaugurated California Gov. Gavin Newsom (D), who has prioritized combating California’s wildfire crisis, said in a statement Monday that he will work with lawmakers and stakeholders in the coming months to find “a solution that ensures consumers have access to safe, affordable and reliable service, fire victims are treated fairly, and California can continue to make progress toward our climate goals.”

Reuters contributed to this report.

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Elon Musk’s SpaceX To Slash 10 Percent Of Staff

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In a major shakeup at Elon Musk’s aerospace company, SpaceX announced Friday that it will cut 10 percent of its employees.

Behind the move is a planned realignment of its workforce in order to meet its long-term business goals. However, it will mean a significant hit for its current labor pool, which numbers roughly 6,000 people.

In a statement, a SpaceX spokesperson told HuffPost the reduction in staff was needed so that the company could set itself up for future successes.

To continue delivering for our customers and to succeed in developing interplanetary spacecraft and a global space-based Internet, SpaceX must become a leaner company. Either of these developments, even when attempted separately, have bankrupted other organizations. This means we must part ways with some talented and hardworking members of our team.

We are grateful for everything they have accomplished and their commitment to SpaceX’s mission. This action is taken only due to the extraordinarily difficult challenges ahead and would not otherwise be necessary.

One of SpaceX’s major goals, as alluded to in its statement, has been to send tourists into space, potentially even landing humans on Mars with a project called Starship. In September, it was revealed that Japanese entrepreneur Yusaku Maezawa would be among the first passengers on the company’s voyage to the moon, which is expected to take off in 2023.

SpaceX has also embarked on a mission to beam internet services to Earth around the globe through a network of satellites dubbed Starlink, the first set of which will be deployed this year.

Despite the staffing cuts, the company has expressed confidence in its financial standing and its investors, and it plans to launch two missions of its Falcon Heavy rockets along with starting test hops of Starship before year’s end.

On Friday morning, SpaceX marked its first mission of 2019 with the launch of a Falcon 9 rocket from Vandenberg Air Force Base in Southern California. 

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