JCP, Cracker Barrel, Kirkland’s, Tariffs & Other Tuesday Thoughts

No shortage of things going on out there in the world of retail and business in general, so sharing some new thoughts, theories and rants of the day.

Tariffs: Of course we’re starting here because this seems to be the thing that starts every conversation these days. Yesterday’s surprise announcement of a truce with China was good news on Wall Street but what about the real world? Is this really a deal or is it like the UK announcement that increasingly looks more like a plan for an agreement for a possible framework than an actual deal? What does this do to other nations that see Trump back down and figure they don’t need to pay as much attention to his nonsense as they might have? And is a 30 percent tariff rate still not a dealbreaker for many companies and for consumers who aren’t going to pay a third more for stuff later this year? As with most things with this guy, it’s never quite what it seems…and it is almost always the furthest thing from beautiful.

JCPenney: The retailer announced a loss for the quarter as sales slid down a few more ticks. Its benevolent sugar daddy owners — the developers who are its landlords in their shopping centers — aren’t about to do anything drastic but sooner or later Penney will need to figure out a sustainable business strategy. The mid-market is a tough spot to do business, granted, but they aren’t going to move up or down enough to make a difference so this is where they are stuck. With all the turmoil at arch-rival Kohl’s, maybe this is an opportunity for a stable operation to take share? And I stand by my crazy suggestion that these two guys will eventually merge, one’s mall-based footprint complementing the other’s strip center real estate. Crazier things have happened.

Cracker Barrel: In a recent Wall Street Journal interview the company said how well its newly remodeled stores were doing and that it was on the right track to fix its business. Ok, but did you notice they’ve remodeled exactly four stores so far and expect to do maybe 25 or 30 this year. That’s about 5 percent of its total 600-unit fleet and at that pace it will take them 20 years to redo all of their stores. Another example of a retailer rolling out revamped stores but failing to mention that this process will take forever to be completed. Anybody can open one or two great stores…well, almost anybody. But 600?

Kirkland’s & Beyond: This one keeps getting screwier and screwier. If Kirkland’s needs $5 million to stay in business that’s pretty frightening, don’t you think? And for Beyond, this is a shell game of constant misdirection, dangling shiny objects like partnerships and stores in front of investors hoping they will not see that the company’s core business continues to go downhill with no real plan to fix it. I just continue to believe this is not going to end well for either one of these companies.

Have a…well, have a Tuesday.