News for the Week of 10/30/16

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“It’s not like it was 30 years ago, but it’s a good mall”...

  • Athleisure - Lululemon, Nike and Under Armour had all killed it in recent years by focusing on athletic wear but the trend is in decline. Jeans may be making a comeback -- so long as they're not uber-cheesy, e.g., True Religion. Meanwhile, J.Crew recently announced a shift towards athleisure. Are they too late to the party?
  • More Under Armour. The Company reported down numbers this quarter, continuing to exhibit the effect The Sports Authority's bankruptcy has on its business. This holiday season will be make-or-break for a large number of retailers and may be watched closely by those who invest in malls...
  • "Dead Malls" - This really puts the disparity between "A" malls and "dead" malls in perspective: Schuylkill Mall in Frackville Pennsylvania filed for bankruptcy this week. Anchor tenants: Bon-Ton, Dunham Sports, KMart, Hess's, and Sears. The latter three closed in the last 24 months, contributing to a "large vacancy rate."
  • Fund Raising: Oak Hill Advisors raised $2.7b for its second distressed fund while Carlyle raise $1.5b for another distressed fund. Clearly folks are prepping for increased activity.
  • Last Week: To quote renowned bankruptcy expert, Keanu Reeves Esq., "Whoa". Last week we discussed the historic Saudi Arabian debt issuance in our piece about "yield." This week, a Saudi official noted that the country's continued busted budget deficit could lead to sovereign bankruptcy within a few years.
  • Last Week Part II: That Ryan Kavenaugh dude has nine lives. It looks like Relativity Media will avoid a Chapter 22 filing (or liquidation) in light of its announced $250mm sale to some Singaporean sucker. Clearly its the Netflix streaming rights that proved compelling given the whopping ~$6mm intake on "Masterminds."
  • "Captain Obvious" Headline of the Week: "Bankruptcies in Oil Field Services are Accelerating."
  • Chart of the Week: To put this in perspective, as recently as 2010, only three states had at least a 10% wind share. Think about that in the the broader oil and gas context: this energy downturn is not just debt-related. We are looking at the broad-based beginning of a secular decline.