Barbarians At the Retail Gates

Just one of many retailers under siege right now.

“They tried to make me go to retail rehab…but I said no, no, no.”

If all of a sudden you hear a chorus of retailers start singing this, you’re not alone. A broad swath of retailing, from Kohl’s to Macy’s and from Bed Bath & Beyond to Dollar Tree is feeling the sudden surge of attackers trying to get them to shape up…or get shipped out.

I guess these things come in waves, just as other lemming-like activities all across the business spectrum. But it just seems like the retail sector has been particularly targeted by outside investors — remember when we used to call them what they usually are, Vulture Capitalists? – intent on shaking up things. Maybe it’s because the stock market is just too freaky these days or interest rates are too low to put your excess cash in the bank or maybe there’s just no residential properties out there to buy. Whatever the reason, those Barbarians are at the retail gates in a force we haven’t seen in some time.

(And mind you, none of this is to say any of this activity compares even remotely to the horrors of the war going on Ukraine. That is truly a tragedy that many of us have a hard time comprehending. The use of battle metaphors here is in the context of all of this being about money, not human lives. Please accept my apologies if you find this offensive, not my intent.)

A few of the most prominent war zones:

Kohl’s: This is the most widespread conflict with the retailer being besieged on several fronts, the outside attackers seeking executive blood, corporate dismemberment and all manner of change. Kohl’s is fighting back fiercely, with new initiatives on store sizes, its Sephora expansion and other tactics designed to show it doesn’t need anybody’s help. Still, there are so many skirmish points that it’s difficult to see how the retailer comes out of this unscathed.

Bed Bath & Beyond: This battle site just broke out two days ago with Ryan Cohen’s RC Ventures seeking big changes, from a split up of the company to an outright sale. And by the way, he’s not too happy with current management either. BBB has been through this before – just three years ago, in fact – and it resulted in a top-to-bottom house cleaning, a process that the company is still in the process of dealing with the aftermath. Bed Bath may fight this one off, a lot depends on the Q4 and annual numbers due within the next several weeks.

Macy’s: It looks like the big department store has fought off the interlopers, at least for the time being. They were seeking a physical/virtual split of the company and assorted other changes but a funny thing happened: Macy’s put up good numbers for the year and the noise level died down quickly. It’s amazing how good business beats down the dissidents. Let’s see if they can keep up the good work.

Dollar Tree: Stores in the dollar space have been on a nice run for years and so, this attack on the company from what we now call “activist investors” – but used to call corporate raiders – was not a common occurrence. Dollar Tree has never been the same since it bought Family Dollar in a battle that opponent Dollar General, it turns out, has to be quite happy to have lost. There’s a peace treaty signed for the time being but again, this is still a work – or war – in process.

These are among the most prominent battlegrounds on the retail front right now, though that situation could change any day. The late, great Amy Winehouse’s lyric seems to be most appropriate, but sadly her tragic fate doesn’t bode well for retail businesses that don’t look for a little rehabilitation.

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