Bankruptcy for Neiman Marcus because of government-imposed shutdown
The beatings will continue until morale improves: Neiman Marcus to file for bankruptcy, furlough 14,000, due to government-imposed shutdown because of the Wuhan panic.
Neiman Marcus Group, one of the largest retailers in the United States, is reportedly ready to file bankruptcy amid the COVD-19 pandemic after defaulting millions in bond payments last week and furloughing 14,000 employees.
Neiman Marcus would become the first major US department store to crumble amidst the economic set backs from the coronavirus outbreak. Reuters reported the company had few options after the coronavirus spurred lockdowns that shuttered non-essential businesses, including all 43 of their stores. This includes Last Call stores and its two New York City Bergdorf Goodman department stores.
And yes, I know it was already struggling, as are many brick-and-mortar department stores because of the shift to online shopping. The government over-reaction to the Wuhan virus however has done a great job of pushing the company over the edge, killing it.
As with any failure like this, the consequences will ripple outward far beyond the loss of this one company. The lost jobs will mean people will not have money to spend, so other businesses will suffer. The downward spiral will only get worse.
Want to know what it was like to live in failing socialist societies like the Soviet Union and Venezuela? You are now getting the chance. In our case the government has apparently bypassed the direct takeover of industry and the economy where it would over a few years run the society into bankruptcy. Instead, it decided to destroy everything by edict, all in one blow.
On Christmas Eve 1968 three Americans became the first humans to visit another world. What they did to celebrate was unexpected and profound, and will be remembered throughout all human history. Genesis: the Story of Apollo 8, Robert Zimmerman's classic history of humanity's first journey to another world, tells that story, and it is now available as both an ebook and an audiobook, both with a foreword by Valerie Anders and a new introduction by Robert Zimmerman.
The ebook is available everywhere for $5.99 (before discount) at amazon, or direct from my ebook publisher, ebookit. If you buy it from ebookit you don't support the big tech companies and the author gets a bigger cut much sooner.
The audiobook is also available at all these vendors, and is also free with a 30-day trial membership to Audible.
"Not simply about one mission, [Genesis] is also the history of America's quest for the moon... Zimmerman has done a masterful job of tying disparate events together into a solid account of one of America's greatest human triumphs."--San Antonio Express-News
The beatings will continue until morale improves: Neiman Marcus to file for bankruptcy, furlough 14,000, due to government-imposed shutdown because of the Wuhan panic.
Neiman Marcus Group, one of the largest retailers in the United States, is reportedly ready to file bankruptcy amid the COVD-19 pandemic after defaulting millions in bond payments last week and furloughing 14,000 employees.
Neiman Marcus would become the first major US department store to crumble amidst the economic set backs from the coronavirus outbreak. Reuters reported the company had few options after the coronavirus spurred lockdowns that shuttered non-essential businesses, including all 43 of their stores. This includes Last Call stores and its two New York City Bergdorf Goodman department stores.
And yes, I know it was already struggling, as are many brick-and-mortar department stores because of the shift to online shopping. The government over-reaction to the Wuhan virus however has done a great job of pushing the company over the edge, killing it.
As with any failure like this, the consequences will ripple outward far beyond the loss of this one company. The lost jobs will mean people will not have money to spend, so other businesses will suffer. The downward spiral will only get worse.
Want to know what it was like to live in failing socialist societies like the Soviet Union and Venezuela? You are now getting the chance. In our case the government has apparently bypassed the direct takeover of industry and the economy where it would over a few years run the society into bankruptcy. Instead, it decided to destroy everything by edict, all in one blow.
On Christmas Eve 1968 three Americans became the first humans to visit another world. What they did to celebrate was unexpected and profound, and will be remembered throughout all human history. Genesis: the Story of Apollo 8, Robert Zimmerman's classic history of humanity's first journey to another world, tells that story, and it is now available as both an ebook and an audiobook, both with a foreword by Valerie Anders and a new introduction by Robert Zimmerman.
The ebook is available everywhere for $5.99 (before discount) at amazon, or direct from my ebook publisher, ebookit. If you buy it from ebookit you don't support the big tech companies and the author gets a bigger cut much sooner.
The audiobook is also available at all these vendors, and is also free with a 30-day trial membership to Audible.
"Not simply about one mission, [Genesis] is also the history of America's quest for the moon... Zimmerman has done a masterful job of tying disparate events together into a solid account of one of America's greatest human triumphs."--San Antonio Express-News
I know it was already struggling,
That’s been a common theme so far, the businesses falling over were already sick, similar situation to most of the people falling over.
There’re other similarities, we expect people to soon die when they’re old and sick and it’s the same for businesses.
One difference though is that when businesses fall over their assets and staff get recycled, integrated into new businesses – which is as it should be, we don’t do so much of that with people that fall over – and I’m not advocating that we should. :-)
Want to know what it was like to live in failing socialist societies like the Soviet Union and Venezuela? You are now getting the chance.
It’s also a preview of life in the US if the Green New Deal ever gets passed.
How we come out of this is almost entirely a function of attitude over the next several months. IF people come out of it with blood in their eyes and determination in their minds, this country could be stronger than ever in just a few months. IF on the other hand, people come out of this with even more dependence on Big Brother to watch out for them, it’s a downward spiral. My track record for predicting attitudes is bad, so I will just outline possibilities in how I see it.
In the month or two that many people have been forcibly outed from their careers, many have had time to reevaluate their life choices. I would not be surprised if over the next several years many new and valuable enterprises are started by people that were triggered by this crisis. Many others are likely to think about gaining life skills that will allow them to build up instead of just getting by on the lower rungs. A lot of underutilized talent in this country. It could also motivate many people to get better at their jobs such that they will earn more and not be in the non-essential category for the next round. Businesses also have a chance to appreciate their people when they don’t have them and possibly try to create a better work place for their good people, along with the realization that some people are an actual detriment to the company and need to go. Last and perhaps more important than any of this is the attitude towards having a government that can arbitrarily destroy what many have spent decades building. This could lead to a groundswell of support for a smaller government more responsive to reality.
Going the other direction, it is quite possible that many more people will ride the system for all it is worth now that their appetite has been wetted. And many politicians will use that along with their new found temporary power to increase their permanent power. It is possible that the minority that is normally in the forefront of the innovations and entrepreneurial spirit to improve our lot in life will be discouraged from driving forward.
I just wish my track record for prediction was good enough to see ahead to either or neither of these scenarios taking place.
John Hare, interesting points, thank you.
A comment I left at Rand Simberg’s:
“Usually when the economy tanks it’s either due to some obvious cause of high supply costs (like OPEC) or due to sustained government actions (as in the Great Depression). remove the cause and, as with a sudden increase and then drop in oil cost, the economy should bounce back quickly. The only thing that might lead to sustained economic damage would be damaging sustained government action.”
So I think it’s very likely that most Western countries and businesses could come out of this with a lot of dead wood trimmed away and healthier than before – and fairly quickly as well, as long as people don’t “ride the system for all it is worth”, that’s something I think there will be little tolerance for.
Andrew_W wrote: “One difference though is that when businesses fall over their assets and staff get recycled, integrated into new businesses – which is as it should be”
Look who doesn’t understand depressions, either. Getting recycled into another business assumes that there will be other businesses to absorb them. Without these other businesses, not only do we look like Russia and Venezuela, but we will depend upon Big Brother government to look out for us. That is what unemployment insurance is all about, in addition to various welfare programs, Social (In)Security, and Medicare.
Another assumption is that there will be businesses that are strong enough to expand into the assets and need the additional staffs. A third problem is that rapid expansion is very hazardous for any company, so a large workforce that needs hiring could take years for the other companies to expand enough to need them.
There have already been calls for equity positions and board directors for the government for any company that accepts bailout money, so this crisis is unlikely to go to waste for those who are turning us into a socialist country (despite Trump’s claim that we would never become socialist).
One has to wonder why some people think that it is good for government to cause bankruptcies of companies in trouble — trimming away “dead wood” — rather than have those companies continue to figure out how to do business more efficiently.
Other businesses that were in good shape a month ago are likely rapidly going into bad shape due to lack of revenue, the lifeblood of any business. How long can the stronger companies hold out during this government imposed shutdown? Few companies, even strong companies, have a safe full of cash that is available and sufficient for a monthlong shutdown.
john hare,
I expect to see both simultaneously. We have to hope that the economic power and will for freedom of the first group will be enough to compensate for the second group. Any examples of recent times that might give us some hints? What could we do to make the first more likely?
Look who doesn’t understand depressions,
You, the Great Depression was a result of sustained bad monetary policy by the Federal Reserve, the US and the rest of the world would have gotten out of the depression – in fact there would never have even been a depression, except that destructive monetary policies just went on and on, all the capital assets were still there, all the people with all the skills were still there, there was nothing other than government policy – mostly that implemented by the Fed, that kept the depression going.
Ian C.,
I mentioned that my track record for prediction is bad, horrible might be a better term. I thought that the recent recession would motivate the work force to goferit as individuals to move ahead as they realized how fragile their finances were. I was wrong and the vast majority of businesses cannot find motivated younger workers. It is generally understood that the younger people have less work ethic than previous generations, and I mostly blame the entitlement mentality created by us older people and government policies. Japanese cars, Chinese products, and immigrant workers are a symptom of our problems rather than a cause for the most part. I have been no better when predicting downward trends.
My guess is that the most productive thing many of us can do is point out that depending on government to solve our problems hasn’t worked but do it without spending excessive time blaming any particular group. Promoting self reliance would be a good thing as self reliance often translates to high motivation.
It might do well to point out the corruptions prevalent in society that has contributed to our problems. Not corruption in the sense of prosecution, but corruption in the sense of corrupted code. What business other than medical can send bills out that are almost completely disconnected from the care actually received without facing legal problems in short order? What business other than education can charge high fees for knowledge that is nearly free online for the motivated? Rent control stops needed construction of new units cold. And so on with legal, insurance and many other things that are out of control, and couldn’t get away with it without government backing. Bashing government is not the issue, rather pointing out the limitations of top-down management is the point where I believe we have failed.
Apologies all,
My last came across as an anti government rant after I thought about it. I see many things government could do that would help in situations like this one. The bad initial projections I can understand as having to work with too little information. Staying with projections proven false is a problem however, and using flawed projections to gain power is more than just a problem. Allowing and even fostering media panic is also something that should be looked into.
For me this is hindsight, but it shouldn’t be for the agencies involved. The mask shortage could have been foreseen with the solution in having various designs on hand for near instant production, especially including those in production that were plenty good enough except that they were designated industrial or something else. The potential ventilator shortage didn’t have to exist at all with fall back simple capabilities already tested and designed. Hospital beds are often far over specialized in the face of a real pandemic. Classrooms with normal beds and some monitoring for many cases IF regular beds are short. A real assessment of medical skills required considering what medics and corpsmen are capable of in the military. There is a lot of capability around without burning out an artificially limited medical group. This all assumes a pandemic as bad as original projections.
In short, there are many things a government could do to prepare for a variety of potential problems. Providing for alternate testing capabilities and alternate mask production is just starters. Realizing that industries cannot increase production beyond a certain point without raising prices would help on everything from masks to TP. Paying overtime costs money and starting another shift costs as well, either of which could have a company losing money with every unit produced if prices are fixed artificially low.
john hare,
Good points. At this time I wouldn’t worry too much about people becoming too passive. This sudden lockdown and the shutdown of parts of the economy might have come as a shock to many. Plus they were told to sit at home and it’ll be over in three weeks. Only gradually do they let the info out that those restrictions are there to stay to varying degrees for undefined times.
When people realize that the government, while helping in the beginning, can only do so much, reliance on the state might go down again. That might lead to changes in motivation to self-improve or start novel or remodeled businesses and re-establish freedoms under those “new normal” conditions. The more positive examples we see, the more people might be inspired to follow.
Andrew_W,
You really i>are obtuse.