Facebook parent company Meta will lay off 11000 employees

New York CNN Business —

Facebook parent company Meta on Wednesday said it is laying off 11,000 employees, marking the most significant job cuts in the tech giant’s history.

The job cuts come as Meta confronts a range of challenges to its core business and makes an uncertain and costly bet on pivoting to the metaverse. It also comes amid a spate of layoffs at other tech firms in recent months as the high-flying sector reacts to high inflation, rising interest rates and fears of a looming recession.

“Today I’m sharing some of the most difficult changes we’ve made in Meta’s history,” CEO Mark Zuckerberg wrote in a blog post to employees. “I’ve decided to reduce the size of our team by about 13% and let more than 11,000 of our talented employees go.”

The job cuts will impact many corners of the company, but Meta’s recruiting team will be hit particularly hard as “we’re planning to hire fewer people next year,” Zuckerberg said in the post. He added that a hiring freeze would be extended until the first quarter, with few exceptions.

In September, Meta had a headcount of more than 87,000, per a September SEC filing.

Meta’s core ad sales business has been hit by privacy changes implemented by Apple, advertisers tightening budgets and heightened competition from newer rivals like TikTok. Meanwhile, Meta has been spending billions to build a future version of the internet, dubbed the metaverse, that likely remains years away from widespread acceptance.

Last month, the company posted its second quarterly revenue decline and said that its profit was cut in half from the prior year. Once valued at more than $1 trillion last year, Meta’s market value has since plunged to around $250 billion.

“I want to take accountability for these decisions and for how we got here,” Zuckerberg wrote in his post Wednesday. “I know this is tough for everyone, and I’m especially sorry to those impacted.”

Shares of Meta rose 5% in trading Wednesday following the announcement.

Meta is not alone in feeling the pain of a market downturn. The tech sector has been facing a dizzying reality check as inflation, rising interest rates and more macroeconomic headwinds have led to a stunning shift in spending for an industry that only grew more dominant as consumers shifted more of their lives online during the pandemic.

“At the start of Covid, the world rapidly moved online and the surge of e-commerce led to outsized revenue growth,” Zuckerberg wrote Wednesday. “Many people predicted this would be a permanent acceleration that would continue even after the pandemic ended. I did too, so I made the decision to significantly increase our investments. Unfortunately, this did not play out the way I expected.”

“I got this wrong, and I take responsibility for that,” he added.

Meta’s headcount in September was nearly twice the 48,268 staffers it had at the start of the pandemic in March of 2020.

A handful of tech companies have announced hiring freezes or job cuts in recent months, often after having seen rapid growth during the pandemic. Last week, rideshare company Lyft said it was axing 13% of employees, and payment-processing firm Stripe said it was cutting 14% of its staff. The same day, e-commerce giant Amazon said it was implementing a pause on corporate hiring.

Also last week, Facebook-rival Twitter announced mass layoffs impacting roles across the company as its new owner, Elon Musk, took the helm.

In addition to the layoffs, Zuckerberg said the company expects to “roll out more cost-cutting changes” in the coming months. Meta, which like other tech giants is known for its vast, perk-filled offices, is rethinking its real estate needs, he said, and “transitioning to desk sharing for people who already spend most of their time outside the office.”

“Overall,” he said, “this will add up to a meaningful cultural shift in how we operate.”

Shopify latest tech company to announce layoffs, cutting 1,000 jobs

Anne D'Innocenzio

Associated Press

NEW YORK – Shopify is cutting 10% of its staff, or about 1,000 employees, as the e-commerce company reckons with an unexpected sales downturn after a pandemic-fueled explosion.

There has been a wave of layoffs or cutbacks in the tech sector with Wall Street distancing itself from some of the fast-growth companies that flourished over the past two years.

Shares of Shopify Inc., based in Ottawa, Ontario, tumbled 15%.

In a memo sent to employees Tuesday, Tobias “Tobi” Lütke, the company’s founder and CEO, said job cuts will be made across recruiting, support and sales departments. The company said it’s also eliminating over-specialized and duplicate roles, as well some groups that were “convenient to have but too far removed from building products.”

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The company had anticipated that the pandemic would accelerate the entrenchment of e-commerce sales by five or even 10 years, Lütke wrote, and the company expanded to match those expectations. But he said it’s now clear that bet didn’t pay off. Spending, he said, appears closer to patterns seen before the arrival of COVID-19.

“As a consequence, we have to say goodbye to some of you today and I’m deeply sorry for that,” Lütke wrote.

Shopify was founded in 2006 as web designer for retailers, but has expanded into a suite of services including payments, marketing, and shipping.

Sales leapt 86% between 2019 and 2020, and another 57% jump, to $4.61 billion, last year.

By May, however, Shopify warned of slower revenue growth as the pandemic boom faded.

Employees who are let go will get 16 weeks of severance pay, plus an additional week for every year of tenure, the company said.

The layoffs were first reported by The Wall Street Journal.

Shopify reports second quarter earnings results Wednesday.

Wall Street Journal: Mark Zuckerberg tells employees layoffs coming ...

CNN Business —

Meta CEO Mark Zuckerberg told company executives that major layoffs at the tech giant will begin on Wednesday morning, the Wall Street Journal reported Tuesday afternoon.

Meta declined to comment to CNN on the report, which said Zuckerberg told the executives at Facebook (FB)’s parent company that he is accountable for the job cuts, after his over-optimism about growth had led to excessive hiring.

Citing unnamed sources familiar with the matter, the Journal reported that the upcoming job cuts will likely impact many thousands of employees and mark the first broad headcount reductions in the company’s history.

Meta had more than 87,000 employees as of September, per a Securities and Exchange Commission filing, representing a year-over-year increase of 28%, as it staffed-up during the pandemic while business boomed.

More recently the company’s core business has been hit hard by fast-growing competition from rivals such as TikTok, as well as recent changes from Apple (AAPL) related to ad-targeting. Fears of a looming recession have also led to advertisers tightening their belts. Once boasting a market capitalization of more than $1 trillion last year, Meta is now valued at about $250 billion.

Meanwhile, the company has also been spending billions on a future version of the internet dubbed the metaverse, which likely remains years away. Late last month, Meta posted its second quarterly revenue decline since going public and reported that its profit was less than half the amount it made during the same period in the prior year.

Amid a broader market downturn that has particularly pummeled the tech sector, shares for Meta have fallen more than 70% in 2022 alone.

The reports of significant layoffs at Meta come as other tech companies have announced major job cuts. Last week, rideshare company Lyft said it was axing 13% of employees, and payment-processing firm Stripe said it was cutting 14% of its staff. The same day, e-commerce giant Amazon (AMZN) said it was implementing a pause on corporate hiring.

Also last week, Twitter announced sweeping job cuts across the company after Elon Musk took the helm following his acquisition of the company for $44 billion, which required taking on significant debt.

Meta layoffs: Tech company plans to let go thousands of employees

Facebook parent Meta plans to begin large-scale layoffs this week in what could be the company’s most significant head-count reductions in its history, according to reports.

The job cuts are expected to affect thousands of workers, and the announcement could come as early as Wednesday, The Wall Street Journal reported, citing unnamed sources. Meta had more than 87,000 employees as of the end of September, according to a securities filing.

Meta declined to comment Monday about the reported layoffs.

The news of the wide-scale job cuts came after CEO Mark Zuckerberg said he expected Meta to enter 2023 with roughly the same headcount during the company’s third-quarter earnings call on Oct. 26.

“In 2023, we're going to focus our investments on a small number of high priority growth areas,” Zuckerberg said. “In aggregate, we expect to end 2023 as either roughly the same size, or even a slightly smaller organization than we are today.”

Meta Platforms Inc. reported its revenue declined for a second consecutive quarter last month, raising questions about the company’s plan to spend billions building the metaverse, an immersive future online world.

Meta has been struggling financially for months as the company competes with newer social media platforms like TikTok for digital advertisement and increases its spending.

Zuckerberg warned employees in July about “one of the worst downturns that we've seen in recent history” and announced a hiring freeze in September, according to reports.

Meta layoffs:Facebook parent company to lay off more than 11,000 employees

'This is a dicey moment':Amazon, Apple, other tech giants lose billions in value as market wobbles

Wave of layoffs at tech companies

With the reportedly planned layoffs, Meta joins a number of tech companies that have recently announced job cuts or hiring freezes after rapid growth during the pandemic, as employers fear the U.S. could enter a recession.

Facebook rival Twitter last Friday began mass layoffs a week after Elon Musk’s takeover that affected half of the company’s workforce of more than 7,500 full-time employees. The company reportedly began reaching out to dozens of employees to ask them to return, according to Bloomberg.

'A massive drop in revenue':Musk blames activists for Twitter's woes amid mass layoffs

E-commerce giant Amazon announced last week that it’s pausing incremental corporate hiring because the economy is “in an uncertain place.”

Lyft, meanwhile, said it will lay off 13% of its employees, or about 700 workers. Payment processing platform Stripe said it’s reducing its headcount by about 14%.

“We were much too optimistic about the internet economy’s near-term growth in 2022 and 2023 and underestimated both the likelihood and impact of a broader slowdown,” Stripe CEO Patrick Collison said in a note to employees.

What is Meta?

Zuckerberg announced last year that Facebook (the company, not the social media platform) was changing its name to Meta to reflect the company's focus on the metaverse, which will take years to develop.

Meta owns Facebook, Messenger, Instagram and WhatsApp. Reality Labs makes the company's augmented and virtual reality products.

Metaverse explained:What exactly is it? And when will it get here?

Meta said to be planning significant layoffs, the Wall Street Journal ...

CNN Business —

Facebook-parent Meta is planning the first significant layoffs in its history as the company grapples with a shrinking business and fears of a looming recession, according to the Wall Street Journal.

The job cuts are expected to impact thousands of workers and could begin as early as this week, the Journal reported over the weekend, citing unnamed people familiar with the matter. Meta has a headcount of more than 87,000, according to a September SEC filing.

Meta declined to comment on the report.

On a conference call last month to discuss its earnings results for the third quarter, CEO Mark Zuckerberg said that he expects the company to end 2023 “as either roughly the same size, or even a slightly smaller organization than we are today.”

The possible cuts come as tightened advertiser budgets and Apple’s iOS privacy changes have weighed on Meta’s core business. The company last month posted its second quarterly revenue decline and reported that its profit was cut in half from the prior year. The drop in profitability is largely driven by the billions Meta is spending to build a future version of the internet called the metaverse that likely remains years away.

Once boasting a market capitalization of more than $1 trillion last year, Meta is now valued at about $250 billion. (After reports of the job cuts, Meta’s stock opened more than 5% higher on Monday morning.)

Meta is far from the only tech company said to be rethinking staffing. In a stunning shift for an industry sometimes thought of as untouchable, a number of tech companies have announced hiring freezes or job cuts in recent months, often after having seen rapid growth during the pandemic.

Last week, rideshare company Lyft said it was axing 13% of employees, and payment-processing firm Stripe said it was cutting 14% of its staff. The same day, e-commerce giant Amazon said it was implementing a pause on corporate hiring.

Facebook-rival Twitter made sweeping cuts across the company on Friday under its new owner, Elon Musk. The cuts impacted its ethical AI, marketing and communication, search and public policy team, among other departments.

In the days since, however, Twitter (TWTR) has reportedly asked dozens of laid off employees to return, according to Bloomberg.

Google becomes the latest tech giant to slow hiring | CNN Business

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New York CNN Business —

Friday’s jobs report came in strong: the US economy added 261,000 new jobs in October, blowing away analyst expectations of 200,000, even as unemployment ticked up to 3.7%.

But don’t let the jobs boom lull you into a false sense of employment security. Job cuts and pauses on hiring are beginning to flow across the tech sector, which boasts some of the most valuable companies in the world. That’s bad news for the economy as a whole.

What’s happening: Tech companies are announcing an alarming number of layoffs and hiring freezes.

▸ Amazon (AMZN) announced on Thursday that it is pressing pause on corporate hiring. “We anticipate keeping this pause in place for the next few months, and will continue to monitor what we’re seeing in the economy and the business to adjust as we think makes sense,” wrote Beth Galetti, senior vice president of people experience and technology at Amazon (AMZN) in a note to employees.

Late last month, Amazon forecast its revenue for the holiday quarter would be lighter than analysts had expected, causing its stock to fall sharply. Shares of Amazon are down more than 47% this year.

▸ Apple (AAPL) has reportedly instituted a hiring freeze of its own in all areas except research and development. In a statement, Apple (AAPL) said that it will continue to hire and is confident in its future, “but given the current economic environment we’re taking a very deliberate approach in some parts of the business.”

Like other tech companies, Apple is worried about slower growth during the holiday season, higher interest rates and waning consumer spending. Covid lockdowns in China are also hurting production of the iPhone 14. Apple stock is down about 25% so far this year.

▸ Meta is planning to begin large-scale layoffs this week, the Wall Street Journal reported on Sunday. The parent company of Facebook (FB), Instagram and WhatsApp could cut thousands of jobs from its workforce of 87,000, and an announcement could come as soon as Wednesday, according to the report.

▸ Lyft (LYFT) said last Thursday that it will lay off 13% of its employees, or nearly 700 people, as it rethinks staffing amid rising inflation and fears of a looming recession. “We know today will be hard,” Lyft (LYFT) founders Logan Green and John Zimmer wrote in an employee memo obtained by CNN. “We’re facing a probable recession sometime in the next year and rideshare insurance costs are going up.”

In a filing announcing the layoffs, Lyft said it would likely incur $27 to $32 million in restructuring charges. “We are not immune to the realities of inflation and a slowing economy,” Lyft’s founders wrote in the memo to staffers. Shares of the car-share company are down nearly 70% so far this year.

▸ Online payments giant Stripe will lay off about 14% of its staff, CEO Patrick Collison wrote in a memo to staff Thursday. “We were much too optimistic about the internet economy’s near-term growth in 2022 and 2023 and underestimated both the likelihood and impact of a broader slowdown,” Collison wrote in the note. Just last year, Stripe became the most valuable US startup, with a valuation of $95 billion.

Chime, a private fintech firm, also announced it will lay off 12% of its 1,300-person workforce.

▸ Twitter on Friday announced extreme layoffs, noting that offices would be locked and badge access suspended as new CEO Elon Musk cuts about half of its 7,500-person workforce.

The bottom line: Headline jobs numbers and third-quarter corporate earnings still reflect a strong economy overall. But other companies won’t be immune to the softening demand from consumers and businesses that tech companies have noted.

Advertiser flight hits Twitter

More bad news for Twitter (TWTR): Elon Musk said on Friday that the company has seen a “massive drop in revenue,” as a growing number of advertisers pause their spending on the platform following his controversial $44 billion acquisition of the company.

He attributed the decline to “activist groups pressuring advertisers, even though nothing has changed with content moderation and we did everything we could to appease the activists.”

General Mills (GIS) and Volkswagen Group, which owns Audi, Porsche and Bentley, have confirmed to CNN that they’ve paused their paid activities on the platform in the wake of Musk’s takeover. Mondelez International (MDLZ) and Pfizer (PFE) have also reportedly joined that list.

On Friday, a group of watchdog organizations including the Anti-Defamation League, Free Press and GLAAD, increased their pressure on brands to rethink advertising on Twitter. The groups pointed to Friday’s mass layoffs of Twitter staff as a key factor, citing fears that Musk’s cuts will make it difficult to enforce Twitter’s election integrity policies along with other anti-hate speech policy.

The takeaway: This is a key moment for Musk, who spent much of his week in New York trying to keep advertisers on board with Twitter. It doesn’t help that the uncertainty around the platform comes at a bad time for ad revenue-dependent tech companies. Google and Meta both cited lower ad payouts as a massive challenge in their most recent earnings reports.

More potential supply chain woes

The threat of a US rail strike that could disrupt supply chains is still very real.

Two rail unions reached tentative deals with the railroads in September, ahead of a strike deadline, only to have their membership vote against ratifying them. Now, US Labor Secretary Marty Walsh says that without a deal he expects Congress will step in and impose contracts on the unhappy rank-and-file union members.

“My goal is to get those two unions back at the table with companies and get this thing done,” Walsh told CNN Friday. He said a negotiated agreement would be “the best thing we can do is avoid any type of rail strike or slowdown.”

If any rail unions were to go on strike, all the rail unions — which together represent about 110,000 members — would honor their picket lines and refuse to work.

That would spell bad news for supply chains. About 30% of US freight moves by rail. Prices of goods from gasoline to food and cars could soar if trains halt. In addition, factories could be forced to shut temporarily due to parts shortages. Goods that consumers want to buy during the holiday season could be missing from store shelves.

Walsh was involved in a 20-hour bargaining session that reached tentative labor deals just hours before a Sept. 16 strike deadline. He said barring new negotiated agreements, Congress would have to impose a contract on the unions, as a way to keep union members on the job.

If “for some reason [one of the unions] doesn’t get to an agreement with the companies then … Congress will have to take action to avert a strike in our country,” he said.

Amazon layoffs: Company plans to lay off thousands of employees ...

CNN Business —

Amazon is planning to lay off some 10,000 employees in corporate and technology jobs, the New York Times reported on Monday, citing anonymous sources with knowledge of the matter.

The job cuts could start as early as this week, and will likely include staff working on Amazon (AMZN) devices (such as its voice-assistant Alexa), as well as people in its retail and human resources divisions, according to the report. “The total number of layoffs remains fluid,” the report stated.

Amazon did not immediately respond to CNN Business’ request for comment Monday. CNN has not been able to independently confirm the report. The Wall Street Journal also reported Monday that Amazon is set to lay off thousands of workers, citing a person familiar with the matter.

The news would make Amazon the latest in a spate of tech companies that have announced significant layoffs in recent weeks, amid broader economic uncertainty and a sharp slowdown in the demand many tech giants saw during the pandemic that led them to quickly add staff. Last week, Facebook-parent Meta announced it is laying off 11,000 employees.

Earlier this month, Amazon said it was freezing corporate hiring “for the next few months,” citing economic uncertainty and “how many people we have hired” in recent years. Amazon rapidly grew its headcount as the pandemic shifted consumer habits and spending towards e-commerce. In its most-recent earnings report, however, Amazon forecast its revenue for the holiday quarter would be lighter than analysts had expected.

Shares in Amazon have fallen more than 40% in 2022 so far amid a broader market decline.

News of potential layoffs comes at a crucial time for the retail industry, ahead of the holiday shopping season. Despite recession fears and inflationary pressures, the National Retail Federation is predicting a 6% to 8% sales increase from last year during the holiday shopping months.

Last month, Amazon founder Jeff Bezos tweeted about the possibility of a looming recession, writing, “the probabilities in this economy tell you to batten down the hatches.” In an interview with CNN’s Chloe Melas on Saturday, Bezos said that advice was meant for business owners and consumers alike. “Take some risk off the table,” he said. “Just a little bit of risk reduction could make the difference.”

HP says it will lay off thousands of workers over the next couple ...

Snapchat to lay off more than 1,200 staffers, or 20% of global ...

CNN —

Snap Inc., the parent company of the popular app Snapchat, announced plans to lay off some 20% of its more than 6,400 global employees.

The news will impact the jobs of more than 1,200 staffers at the tech giant, and comes as broader economic conditions have deteriorated in recent months amid rising inflation and the Federal Reserve’s interest rates hikes. The recent market downturn has especially pummeled the tech sector, where news of hiring freezes, layoffs, and other cost-cutting measures have dominated headlines for months.

Snap CEO Evan Spiegel announced the news in a statement Wednesday, which was shared with CNN Business, saying the company is restructuring to focus on “three strategic priorities: community growth, revenue growth, and augmented reality.”

“As a result, we are sunsetting several projects, reducing the size of our team by approximately 20 percent, and announcing the promotion of Jerry Hunter to Chief Operating Officer,” Spiegel’s statement added.

The chief executive continued: “Changes of this magnitude are always difficult, and we are focused on supporting our departing team members through this transition. We are deeply grateful for their many contributions to Snap.”

Snap reported it had 6,446 full-time employees as of the second quarter of 2022, according to a US Securities and Exchange Commission filing.

Snap stock has plummeted by more than 75% since the start of the year. Shares of Snap took a major tumble last month, after the company reported dismal sales growth and warned investors that the economy had worsened at a faster pace than expected.

In a separate memo to staffers from Spiegel, shared publicly online, the chief executive said leaders will notify those impacted as soon as possible.

“In the United States, we will provide at least four months of compensation replacement, as well as financial assistance to enroll in COBRA, so that team members will have until the end of the year to find new opportunities while still receiving compensation and health benefits from Snap,” he wrote.

He added that the “extent of this reduction” should “substantially reduce the risk of ever having to do this again.”


Sears and Kmart might not have enough money to stock their shelves

Charisse Jones

USA TODAY

Sears, an iconic department store chain whose name is as steeped in Americana as apple pie and Levi's jeans warned that it might be going the way of the blue light special, uncertain that it can survive more than another year in the midst of the upheaval that has disrupted the retail industry.

But despite the death watch that has taken root around a brand that was once a lifeline for the American shopper, Sears Holdings which also operates Kmart stores, still has cash to invest, assets to sell, and a plan to move forward that some experts say signals that its demise is not imminent.

Investors were shocked on Tuesday when the company that operates Sears said in a filing with the Securities and Exchange Commission that it had "substantial doubt" about its ability to stay in business unless it can borrow more and tap cash from assets. Its stock plunged 12.3% to $7.98 by the time markets closed on Wednesday.

"Our historical operating results indicate substantial doubt exists related to the company's ability to continue as a going concern," Sears Holdings said in a filing with the Securities and Exchange Commission.

But analysts say that Sears may have more time to stage a turnaround than other companies who made a similar declaration in the past.

A three-year-old rule change requires businesses to be more transparent about potential risks they face within a year of their reported financial statements. Sears, which has closed stores and borrowed millions from its own CEO, acknowledged in the federal filing the headwinds it faces as shoppers bypass traditional retailers for online sellers. Yet, in that same filing, independent auditor, Deloitte, gave an opinion that expressed confidence in Sears' viability.

“Those are the people who are really intimate with Sears and its finances, and if they’re not saying there is a problem, I’m going to buy it,’’ says Robert Rostan, CFO for Training The Street, a firm that provides financial training to banks and financial institutions. “Yes, they are one inch closer to bankruptcy, but I don’t think (Sears' situation has) changed materially.’’

Sears has been roiled by many of the same challenges that are confronting the broader retail industry, with traditional stores struggling to compete with online sellers. But Sears has also suffered in the wake of its management's decisions, including the sale of its more than $30 billion credit portfolio to Citibank in 2003, and a merger with Kmart, another struggling chain, a year later.

That tie-up was shepherded by Eddie Lampert, the hedge fund manager who is Sears' Holdings CEO. He has been accused of having conflicting interests with those of other Sears investors, as he cordons off assets that could cushion his personal financial losses if the company ultimately goes bankrupt.

Sears has also failed to keep up with changing shopper tastes and habits, losing customers to specialized stores and rivals such as Walmart even before the competition from e-commerce sites took hold. The company hasn't turned a profit since 2010 and in 2016 racked up more than $2.2 billion in losses.

Sears is taking steps to steer itself back to profitability. In January, it said it planned to close 150 stores. And a month later, the retailer initiated a restructuring program aimed at cutting $1 billion in costs annually and reducing debt by $1.5 billion helped by proceeds from the sale of one of its most valuable brands, Craftsman tools to Stanley Black & Decker.

"It is very important to reiterate that Sears Holdings remains focused on executing our transformation plan and will continue to take actions to help ensure our competitiveness and ability to continue to meet our financial obligations,'' the company said in a blog post Wednesday. It did not return requests from USA TODAY seeking further comment.

Still, Sears said in its Tuesday filing that it can't be sure it will be able to raise the cash to keep going. If it continues to experience operating losses and is unable to generate additional cash, it may not be able to access additional funds under its credit agreement or be able to afford to pay for inventory to stock its stores or pay for other services it needs to operate.

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"We acknowledge that we continue to face a challenging competitive environment," Sears said in the filing, noting that after its 2016 loss, it had to finance its cash needs for operating expenses from "investing and financing activities."

Sears, which at the end of its fiscal year had about 140,000 employees, said that it expects to continue to try to generate cash from real estate sales and borrowing. The company said it is also exploring ways to "unlock value" through its Home Services and Sears Auto Center, Kenmore appliances and DieHard batteries and parts business by partnering with other companies, or other means. It says it hopes those actions are enough to ward off the "substantial doubt" that it warned about in the filing.

Dan Nicolich, an analyst at Reorg Covenants, a service that follows the leveraged finance market, said that though Sears "is issuing a warning, it has outlined steps it is taking to stay solvent which may mitigate concerns and help appease auditors.”

But others believe Sears' demise is only a year or two away.

"The business has enough cash on hand and debt financing to see it through this year,'' says Neil Saunders, managing director of retail analysis firm Global Data. But with Sears' liabilities currently exceeding its assets by nearly $4 billion. "it will have trouble beyond that, and it will likely collapse in 18 months to a year. Time and money are both running out for the once iconic brand.''

Sears, steeped in nostalgia, would be missed by many shoppers.

Founded in 1886, Sears was built around its famous catalog that was so complete that entire houses could be ordered -- delivered in pieces to be built on a site. For decades, Sears reigned supreme in middle America by offering the widest range of products -- from jewelry to electric saws, dresses to tires.

.

"I've been coming to Sears as long as I've known,'' says Ron Marcinko, a furniture builder in Antioch, Tenn. who has been shopping at Sears for nearly half a century. He believes other stores' tools can't compare to the quality of Sears' Craftsman brand. "Now Sears is slowly shutting down and I have to buy off-brand tools. It's a shame to see the good stores close."

John Krug, 85, of Springettsbury Township, Pa. worked for Sears for 42 years. He retired in 1989.

It was a store where the customer was always right, says the retired executive. And Krug recalls how shoppers would come to the Sears store that once sat in the former York County Shopping Center to buy hot dogs and paper cups of root beer at the lunch counter. "At lunchtime, the line was 10 miles long," Krug said.

Vic Tuseck, a 64-year-old plumber in Los Angeles who was visiting a Sears in the suburb of Torrance, reminisced about how the department store chain had been a presence since he was a child. "I'd hate to see it disappear,'' he said. "I'm from Ohio. They were always there. They had the best prices on TVs.''

But other shoppers voiced the indifference that has made Sears more of an afterthought than a destination for many consumers.

"I hardly ever come to Sears because I shop more online or at Walmart where I can buy my groceries at the same time," said Jan Minter, who was checking out mattresses at Sears in her hometown of Goodlettsville, Tenn, near Nashville. "I always try to find the cheapest price."

Contributing: Lizzy Alfs of The Tennessean; Gary Haber with the York Daily Record,Jefferson Graham with USA TODAY in Los Angeles,

A look back at Sears:

Why we loved Sears: The Sears catalog

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With Sears on the brink, what are shoppers to do?

Keith Barry

Reviewed.com

After the parent company of Sears and Kmart department stores said Tuesday that there was “substantial doubt” whether it could stay in business, people might be wondering whether it’s safe to shop at the struggling retailer—and what will happen to Sears warranties and gift cards.

In January, Sears Holdings announced plans to close 150 stores. But what can shoppers expect if the retailer succumbs to its financial woes?

“The answer, of course, is that it depends—and there’s no easy answer,” said Tara Twomey, an attorney with the National Consumer Law Center (NCLC).

Currently, Sears Holdings is still in the midst of a restructuring plan designed to rescue the 131-year-old retailer, and retail analysts say it's possible the company may still survive.

If that plan fails, however, there is a chance that Sears will cease to exist — at least not as customers know it today.

(A Sears spokesperson declined to comment for this article beyond a prepared statement from company CFO Jason Hollar. It said, in part, that the company is “a viable business that can meet its financial and other obligations for the foreseeable future.”)

How the company chooses to wind down operations, and whether it is able to spin off its best-known brands, would largely determine how customers could redeem gift cards, make warranty claims, and get parts and service for items they’ve purchased.

One scenario, which Twomey called “unlikely,” is a bankruptcy in which all Sears’ assets are liquidated. In that case, retailer and extended warranties would not be honored, and gift cards would be worthless.

“If they completely shut down, just closed their doors, you wouldn’t be able to take advantage of that warranty,” she said. Prospects would be better for customers if the company reorganized under bankruptcy protection: “It’s possible that these warranties could survive,” she said. And even without coverage from Sears, some products may have manufacturer warranties that remain valid.

A more likely case is that Sears Holdings will continue attempts to spin off its remaining brands, like Kenmore appliances and DieHard automotive supplies.

Earlier this month, Sears already completed a $900 million sale of its Craftsman brand of tools to Stanley Black & Decker. Although that sale is now a cause of some concern, the new owners announced plans to continue honoring warranties—including a well-known lifetime warranty on Craftsman hand tools.

According to Twomey, such a warranty transfer is not uncommon when a famous brand is sold. “Maybe they have no legal obligation to honor that warranty, but as a means of keeping customers they agree to honor those warranties.”

Katherine Hutt, a spokesperson for the Better Business Bureau, said that customers would likely be taken care of in some way if Sears did fold. The company has been a BBB member since 1926, and currently has an A+ rating.

“A company like Sears that has been known for its customer service and its warranties and long-term guarantees on things like Craftsman tools — they’re not likely to leave customers in the lurch,” she said. “If you have a warranty or a guarantee, you’re probably going to be OK.”

There is precedent for what happens to customers after major retailers fold. When Circuit City shut its doors in 2009, a third-party insurer administered some extended warranties. Stores occasionally give customers a chance to redeem gift cards before they become worthless.

Additionally, consumers who already own a Kenmore dishwasher or Craftsman lawnmower can rest easy, as replacement parts will still be available. That’s because products with Kenmore, Craftsman, and DieHard badges are all manufactured by third parties who would not be affected if Sears shut down.

For example, today’s Kenmore washing machines are made by Whirlpool Corporation and LG Electronics, while Craftsman-branded garage door openers are made by Chamberlain, who also makes LiftMaster. Shared parts and common designs mean it will be possible to service Kenmore, Craftsman, and DieHard products even if those brands no longer exist.

In the end, the decision of whether to shop at Sears is up to the consumer. According to Hutt, customers should ask questions and read the fine print before they buy.

“You need to understand your own personal risk factor,” said Hutt. “You have to balance the discounts that will come if they are liquidating inventory with not having customer support in the future.”

Sears' $900M sale of Craftsman to Stanley Black & Decker 'voidable'?

Nathan Bomey

USA TODAY

Sears Holdings warned that the recently announced sale of its Craftsman tool brand could fall apart if the ailing department-store chain goes broke by the time the deal is ready to close.

The company said in a public filing Tuesday that the sale of Craftsman to Stanley Black & Decker could be "voidable, in whole or in part" if a court determines that Sears was insolvent at the time of the deal close or became insolvent because of it, among other conditions.

Sears said in the same filing that there's "substantial doubt" about its ability to stay afloat. Sears, in a blog post Wednesday on its site, said that it was required to make the disclosure on its site because of "historical performance," but that it is not in imminent danger of going out of business as it executes its turnaround strategy.

The Craftsman sale, a deal valued at about $900 million, was announced in January and completed March 9.

Other recent transactions, including Sears' 2014 spin-off of retail chain Lands' End, could also be unraveled if the company is deemed to have been insolvent at the time, Sears warned.

The warnings stem from laws that require bankruptcy judges to examine recent transactions in which debtors shed assets to determine whether those deals unfairly extracted value that otherwise would have gone to senior creditors.

Sears and Kmart owner says 'substantial doubt' it can stay in business

If the deals were deemed to violate "fraudulent conveyance and transfer laws and legal capital requirements," the buyers of Sears assets could be required "to turn over value to other entities involved in the transaction and contemplated transactions for the benefit of unpaid creditors," Sears said in the filing.

A Stanley Black & Decker spokesperson did not respond to a request seeking comment Wednesday morning. But the company was aware of the possibility that its acquisition of the Craftsman brand could be accused of being a fraudulent conveyance.

"That would only be an issue for us if it were determined at some point that when they entered into the agreement that they were, in fact, illiquid or insolvent, and we don't believe that's the case based on everything that we know at this point in time," Stanley Black & Decker CEO James Loree told investors in a call in January. "So this has been a challenging transaction from the standpoint of risk management. We've had excellent, excellent legal support and we think we're in a very good place."

Another possible risk to Stanley Black & Decker is that it could be stuck with Craftsman warranty expenses or claims if Sears dissolves.

"We're not contractually obligated in that regard" but "we might take the position that for good commercial sense, we would cover those," Loree said, estimating the potential expense at up to $10 million per year.

Follow USA TODAY reporter Nathan Bomey on Twitter @NathanBomey.

Bed Bath & Beyond warns of possible bankruptcy as sales continue ...

Anne D’Innocenzio

Associated Press

NEW YORK – Struggling Bed Bath & Beyond warned on Thursday that the home goods retailer may need to file for bankruptcy as sales continue to drop and it struggles to attract shoppers.

The Union, New Jersey-based company said that it’s looking at several options including selling assets or restructuring its business in bankruptcy court, but it acknowledged that even those efforts may not be successful.

Shares lost a quarter of their value on the news to trade at $1.82, their lowest level since November 1992.

“There is substantial doubt about the company’s ability to continue as a going concern,” the retailer said in a statement.

The company’s assessment came as its dismal performance continued through the holiday season.

Bed Bath & Beyond expects to report net sales of $1.26 billion for the third quarter ended Nov. 26. That would be a 32% drop from a year earlier. It also anticipates a net loss of roughly $385.8 million for the third quarter, wider than its loss of $276.4 million in the year-earlier period.

The company’s recently-appointed CEO and president, Sue Gove, blamed the poor performance on inventory constraints and reduced credit limits that resulted in shortages of merchandise on the shelves.

Bed Bath & Beyond store closures, layoffs

In August, Bed Bath & Beyond announced it would shutter stores and lay off workers in a bid to turn around its beleaguered business. It closed about 150 stores and slashed its workforce by 20%. It estimated those cuts would save $250 million in the company’s current fiscal year. It also said in August that it had lined up more than $500 million of new financing.

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Mired in a prolonged sales slump, the company also announced back in August that it would revert to its original strategy of focusing on national brands, instead of pushing its own store labels.

That reversed a strategy embraced by its former CEO Mark Tritton, who was ousted last June after less than three years at the helm. It said it would get rid of one-third of its store brands, which had started to be rolled out in the last year or so. Besides Bed Bath & Beyond, the company also runs the buybuy Baby and Harmon chains.

Neil Saunders, managing director of GlobalData Retail, wrote in a report Thursday that Bed Bath & Beyond is “too far gone to be saved in its present form.” He noted that the company could restructure under Chapter 11, but it would still need to come up with a credible plan to reinvent the business, and that is going to be challenging, particularly in a weakening economic environment.

“A catalogue of missteps has run the company into the ground and has made it increasingly irrelevant,” he wrote. “Only very radical action will allow it to survive and even if it does, it will be a shadow of its former self.”

The company is set to release final third-quarter results on Tuesday.

Opinion:Layoffs remind me how painful it is to lose work. I've been on both sides of pink slips.

Sears at Macomb Mall is closing; At Home to replace part of store

The Sears at Macomb Mall in Roseville is on the latest list of store closures from the distressed retailer that is quickly shrinking in size.

The company announced Friday that it is closing another 20 stores — 18 Sears stores and two Kmarts — as it continues to aim to cut $1 billion in expenses this year, mostly through downsizing. All 20 locations were unprofitable, according to corporate filings.

The move adds to the wave of closures that will add up to more than 270 for the year, leaving suburban Chicago-based Sears Holdings with just over 1,100 remaining Sears and Kmart locations.

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With Kmart struggling, closed stores see new life

The Roseville Sears is attached to Macomb Mall. A portion of the Sears has already closed and is being converted to a new At Home home decor store.

What remains of the Sears store will begin a liquidation sale June 30 and close for business in mid-September, a spokesman said. The Sears auto center will stay open and convert to a DieHard Auto Center.

Macomb Mall is owned by Bloomfield Hills-based Lormax Stern. However, the Sears is owned by a Sears-affiliated entity called Seritage Growth Properties.

Matt Drozd, Lormax Stern's director of property management, said he doesn't consider Sears' departure to be a setback for Macomb Mall because At Home stores are popular and should draw more shoppers. Additionally, the remaining Sears space may be filled by another retailer with a bright future.

“From our standpoint, it’s a very positive thing," Drozd said. "Sears' closing brings a great opportunity for the mall and the surrounding area as a whole."

Sears and Kmart have buckled under pressure from other big-box competitors, including Wal-Mart, Lowe's and Home Depot, and have seen significant year-over-year drops in sales. Online shopping has also hurt the corporation's revenues.

Sears Holdings acknowledged in March there was "substantial doubt" the corporation could survive on its own, though the company said its cost-cutting maneuvers and other strategies would improve its chances of carrying on. CEO Eddie Lampert has since blasted critics and said Sears is "fighting like hell."

Sears Holdings has kept itself afloat through complex financial maneuvers and raised cash earlier this year by selling its Craftsman brand to Stanley Black & Decker.

"We understand that members may be disappointed when we close a store, but our Shop Your Way membership platform, websites and mobile apps allow us to maintain these valued relationships long after a store closes its doors," the company said in a statement.

Business Insider reported that the list of stores set to close also includes three in Ohio, three in New York, two in Texas and two in Maryland.

Sears, Kmart to close another 60-plus stores in January 2018

The cost-cutting strategy continues at Sears with another 63 stores targeted for closure early next year.

Emblematic of the struggle facing U.S. department stores, Sears Holdings has already closed more than 350 Sears and Kmart stores this year. An additional 45 Kmart stores and 18 Sears stores will be closing in late January 2018, the company said Thursday.

“Sears Holdings continues its strategic assessment of the productivity of our Kmart and Sears store base and will continue to right size our store footprint in number and size," the company said in a statement. "In the process, as previously announced we will continue to close some unprofitable stores as we transform our business model so that our physical store footprint and our digital capabilities match the needs and preferences of our members."

More:Is Sears circling the drain? Not yet, Wall Street says

The 63 stores will remain open during the holiday season and employees at the closing stores will get severance pay and an opportunity to apply for other jobs within the retail chains. "Liquidation sales will begin as early as November 9 at these closing stores," the company said.

The retail industry s reeling as a growing number of shoppers do their buying online and e-commerce giant Amazon becomes the go-to for many consumers. But the decline of Sears has been particularly stark.

The iconic store chain, whose goods once filled American households from the garage to the living room, has struggled to remain relevant as shoppers increasingly bypass it to head to big box giants like Walmart, or specialty retailers like Best Buy and Home Depot instead.

In March, Sears said in a filing with the Securities and Exchange Commission that it had "substantial doubt" about its ability to stay in business unless it could borrow more and generate additional cash from its assets. However, the notification was required because of a rule change that mandated businesses be more transparent about potential risks they face within a year of their reported financial statements. Independent auditor Deloitte said at the time that it believed Sears Holdings was still viable.

The company has initiated a turnaround plan this year that aims to slash $1 billion in costs annually, and cut the company's debt by $1.5 billion. Shedding low-performing stores has been key to the restructuring, but Sears also sold Craftsman, one of its most valuable brands, to Stanley Black & Decker for roughly $900 million.

In another move that could boost the company's balance sheet, Sears announced in July an agreement to sell its Kenmore appliance brand on Amazon. And the company has been increasing the perks available to its most frequent shoppers.

Just this week, Sears and Kmart launched a nearly month-long sale for members of its "Shop Your Way'' loyalty program to woo customers during the all-important holiday period. Sears shoppers will get discounts ranging from 10% to 50%, and Kmart shoppers will see sales of 10% to 40% on all items through Nov. 25.

Some of the changes, while not increasing profits, do appear to be stemming the financial bleeding. While the company reported a net loss of $251 million for its second quarter that ended July 29, that was down from a loss of $395 million during the same period last year, and also beat S&P analysts projection of $266 million.

Still, there are continuing signs that Sears is no longer the dominant player it once was. Last month, it announced that for the first time in more than 100 years, it would no longer sell Whirlpool appliances because the two companies could not reach an agreement on price.

Here's a list of the stores set to close in January 2018:

Alabama

Kmart, 7200 Us Highway 431, Albertville

Sears, 1701 Mcfarland Blvd E, Tuscaloosa*

Arizona

Kmart, 1214 E Florence Blvd, Casa Grande

Sears, Fiesta Mall, Mesa*

Arkansas

Sears, 5111 Rogers Avenue, Fort Smith*

Sears, 4201 N Shiloh Drive, Fayetteville*

Colorado

Sears, Greeley Mall, Greeley*

Florida

Kmart, 26996 Us Hwy 19 N, Clearwater

Kmart, 6050 Highway 90, Milton

Kmart, 901 Us 27 North, Sebring

Georgia

Kmart, 156 Tom Hill Senior Blvd, Macon

Kmart, 144 Virginia Ave South, Tifton

Kmart, 1203 Cleveland Rd., Dalton

Sears, 8020 Mall Pkwy, Lithonia*

Sears, 1709 Baytree Road, Valdosta*

Idaho

Kmart, 3101 East 17Th St. Ammon

Illinois

Kmart, 1006 N Keller Drive, Effingham

Kentucky

Kmart, 2606 Zion Road, Henderson

Kmart, 230 L Roger Wells Blvd., Glasgow

Kmart, 501 Marsailles Road, Versailles

Kmart, 1300 Us Hwy 127 S., Frankfort

Maryland

Sears, 7885 Eastern Blvd., Baltimore*

Massachusetts

Sears, Berkshire Mall, Lanesboro (Pittsfield)*

Michigan

Kmart, 41601 Garfield Road, Clinton Twp

Kmart, 200 Capital Ave SW, Battle Creek

Kmart, 2125 S Mission St., Mt Pleasant

Minnesota

Kmart, 1547 Highway 59 South, Thief River Falls

Missouri

Kmart, 2233 N Westwood Blvd., Poplar Bluff

Kmart, 16200 East Us Hwy 24, Independence

Kmart, 1400 S Limit Avenue, Sedalia

Kmart, 3901 Lemay Ferry Road, St. Louis

New Jersey

Sears, 1200 Us Rt 22, Phillipsburg*

North Carolina

Kmart, 1130 Henderson Drive, Jacksonville

Ohio

Kmart, 14901 Lorain Avenue, Cleveland

Kmart, 2830 Navarre Road, Oregon

Kmart, 4475 Mahoning Ave, Austintown

Kmart, 1249 North High Street, Hillsboro

Kmart, 1292 Indiana Avenue, St. Marys

Pennsylvania

Kmart, 3382 Birney Plaza, Moosic

Kmart, 2830 Gracy Center Way, Moon Township / Coraopolis

Kmart, 3319 North Susquehanna Trail, Shamokin Dam

Kmart, 22631 Route 68, Clarion

Sears, 2999 E College Avenue, State College

Sears, 300 Lycoming Mall Circle, Pennsdale/Muncy*

Sears, 2334 Oakland Ave, Indiana*

South Dakota

Kmart, 1815 6 Ave SE, Aberdeen

Tennessee

Kmart, 530 Donelson Pike, Nashville

Kmart, 560 South Jefferson Avenue, Cookeville

Kmart, 1806 N Jackson Street, Tullahoma

Texas

Kmart, 4520 W 7 St., Texarkana

Sears, 4000 Sunset Mall, San Angelo

Sears, 4600 S Medford Dr., Lufkin*

Utah

Sears, 754 S State Street, Salt Lake City*

Virginia

Kmart, 4715 Nine Mile Road, Richmond

Kmart, 300 Towne Centre Drive, Abingdon

Kmart, 3311 Riverside Drive, Danville

Kmart, 2315 Wards Road, Lynchburg

Sears, 114 Southpark Circle, Colonial Heights*

Wisconsin

Kmart, 111 Division St North, Stevens Point

West Virginia

Kmart, 800 Grand Central Avenue, Vienna

Kmart, 1287 Winchester Avenue, Martinsburg

Kmart, 301 Beckley Plaza, Beckley

Wyoming

Sears, 1400 Del Range Blvd., Cheyenne

*The Sears Auto Center at these stores will close in early December 2017 and the store itself will close in late January 2018.

Follow USA TODAY reporter Mike Snider on Twitter: @MikeSnider.

Mortgage rates rise to 5.5% as volatility continues | CNN Business

CNN —

Mortgage rates are on the rise again after a dramatic drop last week.

The 30-year fixed-rate mortgage averaged 5.51% in the week ending July 14, up from 5.3% the week before, according to Freddie Mac. That is significantly higher than this time last year when it was 2.88%.

Rates rose sharply at the start of the year, hitting a high of 5.81% in mid-June. But since then, economic concerns have pushed them lower, with rates last week notching the biggest one-week dip since 2008.

Mortgage rates continue to be volatile as the US economy slows and the Federal Reserve raises interest rates in order to cool inflation, said Sam Khater, Freddie Mac’s chief economist.

“With rates the highest in over a decade, home prices at escalated levels, and inflation continuing to impact consumers, affordability remains the main obstacle to homeownership for many Americans,” said Khater.

Growing pressure on the Fed

The rate for a 30-year fixed rate loan ticked higher as financial markets grappled with the latest inflation reading, which pointed to a sharp acceleration in consumer prices in June, said George Ratiu, Realtor.com’s manager of economic research.

In order to tame inflation, the Federal Reserve has been raising interest rates. At its last meeting, it hiked rates by 75 basis points. Last month’s inflation report indicates a similar or even larger increase is on the table at the central bank’s next meeting later this month.

“With inflation approaching a double-digit pace, there’s growing pressure on the Federal Reserve to take a more aggressive stance in its monetary tightening,” he said.

A 75 basis-point hike is largely expected at its meeting in two weeks, but he said it’s becoming clear that markets expect a move closer to 100 basis points.

Ratiu said the real concern is that, at the current pace, rising prices will push consumers up against a financial wall, leading to a sharp pullback in spending – including on homes.

“The Fed has been walking a tightrope of gradually increasing borrowing costs while trying to avoid a knee-jerk reaction from consumers and businesses,” Ratiu said. “However, with inflation soaring, the runway for a soft landing is shrinking considerably, as are the chances of avoiding a recession.”

The Federal Reserve does not set the interest rates borrowers pay on mortgages directly, but its actions influence them. Mortgage rates tend to track 10-year US Treasury bonds. As investors see or anticipate rate hikes, they often sell government bonds, which sends yields higher and with it, mortgage rates.

Ratiu added that the 10-year Treasury slid on the inflation news, while the 2-year Treasury bounced higher, pushing the yield curve deeper into negative territory and heightening concerns of an impending recession. This is notable since yield curve inversions have preceded most economic recessions in the past 50 years.

What does this all mean for home buyers?

Generally, the summer real estate market is absorbing the impact of rising consumer prices and higher interest rates, Ratiu said. But buyers are being forced to make different calculations on what and where they can buy.

“With the monthly mortgage payment of a median-priced home running around $2,000 compared with $1,300 last year, many home buyers are finding that their budgets are no longer sufficient to purchase a home and are hitting ‘pause’ on their search,” Ratiu said.

Simultaneously, many homeowners are rushing to capitalize on record-high prices, putting their homes on the market and boosting the inventory that’s available to buy.

“The combination of dwindling demand and growing supply is reshaping a housing market at the peak of the sales season,” he said.

This is relaxing competition in the market, giving buyers more time and in some cases even pushing prices lower. The share of properties-for-sale with price cuts reached 15% in June 2022, more than doubling last June’s 7%, according to Realtor.com

“We can expect the pace of sales to continue to slow as we move into the second half of the year and markets regain a much needed sense of balance.”

As Sears falters, shadow darkens over American malls

Aamer Madhani

USA TODAY

CALUMET CITY, Ill.—To say that that the River Oaks Center, a sprawling mall in this blue-collar suburb of Chicago, has seen better days is an understatement.

When it opened 50 years ago, it was one of the first big malls in the Chicago area. And as recently as a few years ago, it boasted four major department stores—Carson Pirie Scott, J.C. Penney, Macy’s and a Sears.

But in 2013, Carson's and Sears shut their doors at the mall near the Illinois-Indiana border. And the two remaining anchors—Macy’s and J.C. Penney—are facing strong headwinds. Both retailers have announced plans to close dozens of stores around the country in 2017.

With Sears warning investors Tuesday of "substantial doubt" about its ability to stay in business, the once vibrant River Oaks provides a dour portrait of the tough road ahead for malls across the country in an increasingly disjointed retail landscape. As department stores lose out to online retailers, more malls may have to cope with trying to survive without a coveted anchor -- creating not only a visual reminder of failure, but the loss of a draw to bring shoppers to smaller stores as well.

“We recognize that these are perilous times for malls and shopping centers,” said Pete Saunders, Calumet City’s economic development coordinator, who added that sales tax revenue has plateaued in the community in the aftermath of Carson and Sears closures even as the regional economy has improved. “The most successful malls these days are in the highest income areas, and we’re firmly a working closing community and that has definitely had an impact on us for sure.”

Battered by growing preference for e-commerce as well as competition from discount retailers like T.J. Maxx and Marshalls, there has long been uncertainty about the health of malls. Now, that a once American-stalwart like Sears nears a financial precipice, the storm clouds are only darkening.

Shopping centers like the Macon Mall in Georgia, constructed in 1975 in the midst of the golden age of mall building, are bracing for the impending closure of its J.C. Penney—one of 138 the company plans to shutter. Last year, the mayor of Akron, Ohio, asked residents to stay away from the abandoned Rolling Acres Mall—another shopping center built in 1975 with Sears as its anchor and that once was a regional destination—or face potential prosecution for trespassing.

Analysts, such as the commercial real estate firm CoStar, have projected that nearly 25% of American malls are in danger of losing their anchors. Following a missed $144 million loan payment by the second-biggest U.S. mall owner last year, anxiety about the health of U.S. shopping malls has only grown.

Even before Sears' dire announcement that there is "substantial doubt" about its financial viability, the company, based in Hoffman Estates, Ill., had announced plans to shutter about 150 of its Sears and Kmart stores. Macy’s had announced plans to close about 15% of its stores in 2017.

The ubiquitous mall retailer Aeropostale filed for bankruptcy in May. And others, like American Eagle, Chicos, and The Children's Place are managing multi-year plans to shrink their bricks-and-mortar footprint.

River Oaks, which was recently sold to the Great Neck, N.Y.-based Namdar Realty Group and Mason Asset Management Group by Washington Prime, hasn’t been able to find tenants to take over either of the cavernous spaces vacated by Sears and Carson in the years since they left.

Joel Gorjian, who oversees acquisitions for Namdar, said that he's hopeful the company will soon be able to find tenants to fill the voids left by the departure of the department stores. While the big retailers are fading, he said there are plenty of businesses that mall owners should look to attract to fill the vacancies that would attract the sort of foot traffic that the smaller retailers need to thrive.

"You have to look to alternative uses or entertainment centers," Gorjian said. "You can do a trampoline park, some malls have done skating rings, you can put in a call center, cloud storage (companies) needs space."

Tom McGee, the president and CEO of the trade group International Council for Shopping Centers, suggests that concerns about the demise of the American mall are overblown. Nationally, he said occupancy rates stand at 93.6%, and the industry is seeing more restaurants, movie theaters, health clubs and grocery stores serve as anchors.

"The industry has done a very effective job in managing in this evolving landscape," McGee said.

At Gorjian's company's newly acquired River Oaks mall, the former outer entry of Carson’s entrance remains boarded up, and all signs of Sears presence in the mall are long gone. The indoor entryway to the old Sears is now blocked by a temporary wall with seven small signs advertising other retailers.

About half the stalls at the food court are vacant. When USA TODAY visited around lunchtime Wednesday, few were dining at the mall Chinese, cheesesteaks, and Chicago-style hot dog stalls.

“There are just not a lot of choices, and it feels like it has gotten worse as the big stores have gone,” said Mindy Cross, 73, a mall-walker who has come to the River Oaks on a near-daily basis for years to meet fellow seniors for a stroll, lunch and increasingly less frequent shopping.

READ MORE:

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Is your local Sears or Kmart among 150 stores to be axed? See the list

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Which mall stores are in danger of closing?

James Davis, 70, another mall-walker who has been coming to River Oaks for more than 20 years, said he used to regularly go to the Sears to browse and would regularly find himself opening his wallet. His Chicago home is kitted out with Kenmore appliances that he found during his strolls at the River Oaks Center.

These days, he said, most of his spending at the mall is limited to buying an after-walk bottle of juice or lunch as he chats with his friends.

“There’s not much here that I’m interested in these days,” Davis said of the shopping options.

Damien Berlanger, who manages the Embroidery Spot kiosk, said that the impact of Sears closure has been especially felt by the small retailers.

“The foot traffic is just not what it used to be,” said Berlanger, 30, who has worked for several retailers at River Oaks over the years. “Since Sears closed, you see a lot of the smaller retailers come and go.”

Sai Kambham, who manages a toy kiosk next to Berlanger, said it was difficult to see how doing business at the mall over the long-term could be sustainable. Kambham said that a friend for whom he manages the kiosk pays $1,200 per month in rent for a small space. Business, he said, has not been good.

He said he wondered if there was enough wealth in this town of about 37,000, which has a median household income of less than $40,000, for the mall to thrive.

“There’s just not a lot of people with money around here,” Kambham. “We had a couple of weeks recently when people were getting their tax returns when business was better. Other than that it has been very slow.”

Bob Patel, who owns a small beauty care kiosk in the mall, said that he’s seen business decline by perhaps as much as 15% in the last year. His lease expires in about a year, and he says he’ll try to negotiate for better rent. If he doesn’t get it, Patel said he’ll consider moving his business elsewhere.

“It’s a struggle, but we have a small business and our expenses are manageable,” he said. “We can survive. I don’t know how the bigger businesses do it.”

Follow USA TODAY Chicago correspondent Aamer Madhani on Twitter: @AamerISmad

Brands on the brink: These American brands might not survive ...

Grant Suneson

24/7 Wall Street

Corrections & Clarifications: A previous version of this story misstated which ticket brokering organizations could make a request for a government bailout.

Businesses of all sizes in America are facing an unprecedented crisis as a result of the COVID-19 pandemic. A U.S. Chamber of Commerce report found that 43% of small businesses believe they will not survive six months in these economic conditions. Large businesses are a mixed bag. Some are flush with cash and able to weather a long-term financial downturn, while other major American brands are saddled with massive debt loads and, without a significant change in conditions, may be forced to close their doors forever.

24/7 Wall St. reviewed corporate filings and industry publications to determine the American brands that might not survive the coronavirus crisis.

While every part of the American economy has been impacted by the pandemic, some industries have suffered far greater damage. Brick-and-mortar retailers, theaters, and companies that rely on live events have seen their revenues decimated in the wake of COVID-19.

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Companies are turning to a range of different strategies to survive the pandemic. Many retailers are offering curbside pickup, while other shuttered businesses are selling discounted gift cards for a quick infusion of cash. Unfortunately, one of the most common strategies is to furlough or lay off workers to save on labor costs. Workers all across the country have been affected – the U.S. unemployment rate is up to 14.7%. At least 8.5% of workers filed for unemployment since mid-March in every state.

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Can these 13 retailers survive COVID-19?:Permanent store closings, bankruptcies coming

1. Neiman Marcus

• Industry: Luxury goods

Luxury department store chain Neiman Marcus filed for Chapter 11 bankruptcy protection on May 7 in an attempt to restructure debt and survive the harsh economic conditions created by the coronavirus pandemic. The company had been saddled with $4 billion in debt since its 2013 sale to a private equity firm.

Issues had been compounded by the recent precipitous drop in sales of luxury goods, which were likely some of the first purchases to be postponed during the pandemic. At the time of filing, all of the retailer's locations had been closed and most of its 14,000 employees had been furloughed.

2. StubHub

• Industry: Live events ticketing

With virtually all live events canceled for the foreseeable future, ticket exchange and sale company StubHub is facing an unprecedented situation. StubHub updated its refund policy as more than 20,000 events were nixed. Company President Sukhinder Singh Cassidy told Axios that the company was unable to "take the risk of giving refunds to buyers before recouping the same refund from the seller." This elicited lawsuits from fans who say they never got refunds despite the NBA, NHL, and MLB postponing their seasons and despite the company's own refund policy.

StubHub furloughed most of its staff – around 300 people. The crisis also came at a time that StubHub's $4 billion buyout from Viagogo was halted by U.K. courts in February.

The National Association of Ticket Brokers say they may have to seek a government bailout to keep the industry afloat. The National Association of Ticket Brokers represents dozens of U.S. ticketing companies, although StubHub is not a member of the organization and has not requested any government assistance.

3. J.C. Penney

• Industry: Retail

J.C. Penney's multi-billion dollar debt load, combined with the chain closing most of its stores nationwide because of COVID-19, has cast the company's future into doubt. J.C. Penney is reportedly mulling a bankruptcy filing and recently said it did not make a $12 million interest payment due in April.

4. AMC Theatres

• Industry: Theaters

AMC Theaters was reportedly considering entering bankruptcy in April, but then was looking at raising half a billion dollars through a private placement debt offering. This may have staved off the bankruptcy option at least for the time being.

Although some states are now allowing movie theaters to reopen at reduced capacity, AMC said it is not anticipating a reopening until late June at the earliest. The company closed all theaters in mid-March and furloughed or laid off over 26,000 employees. With no ticket sales, AMC Theaters told its landlords it would stop paying rent in April.

5. Sears

• Industry: Department store

Once an American icon, Sears has struggled for years. In the years since 2010, its last profitable year, the retailer reported losses of $12 billion. After filing for bankruptcy in 2018, Sears continued to shrink operations after restructuring its debt, closing another 100-plus stores since, and staying with just under 200 stores, a fraction of the over 3,000 locations it operated at the beginning of the 21st century.

The coronavirus may be a death sentence for Sears, as all locations have remained closed as of early May. While all large brick-and-mortar retailers are facing challenges with the pandemic and the rise of e-commerce, Sears' shaky financial footing makes it uniquely vulnerable.

6. WeWork

• Industry: Real estate

The new social distancing requirements, which might remain in place for some time, could spell the end for co-working spaces – particularly WeWork. The company's occupancy dropped by nearly two-thirds in April. WeWork stopped paying its rent that month and is reportedly renegotiating its leases.

The company came into 2020 already in disarray. In September 2019, co-founder and former CEO Adam Neumann stepped down after reports of his chaotic management style surfaced and a planned IPO was scrapped. Neumann sued WeWork's new owner, SoftBank, after it announced it would no longer purchase stock from Neumann and others.

7. J. Crew

• Industry: Clothing

Weeks after closing its doors on March 16, J. Crew filed for Chapter 11 bankruptcy. The company also said it reached an agreement with its lenders to convert more than $1.6 billion of the company's debt into equity. J. Crew also secured a $400 million loan, though it may be increasingly difficult for the company to pay it back as its credit rating has been downgraded twice by credit rating agency Moody's during the pandemic. The company was planning an IPO for its Madewell brand in early 2020 to help ease the debt burden, but those plans are on hold indefinitely.

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8. Frontier Communications

• Industry: Communication services

Telecommunications company Frontier Communications entered the pandemic in a dire situation, with a debt burden of more than $17 billion. The telecom provider also carries a credit rating of SD (selective default), meaning credit rating agency Standard & Poor's believes Frontier selectively defaulted on a financial obligation.

In an attempt to lessen its debt, Frontier declared bankruptcy in April and sold its operations and assets in four northwest U.S. states. Frontier's stock has been in decline for years, and was worth less than 8 cents per share as of May 8.

9. Bed Bath & Beyond

• Industry: Retail

Though some of Bed Bath & Beyond's products, like soaps and toiletries, may have been in high demand since the pandemic hit the U.S., many other of the company's products have likely not sold that well. The company struggled ahead of the pandemic as well. In the fourth quarter of fiscal 2019, which ended February 29, 2020, sales dropped more than 6%.

As of May 8, stores remained closed, and most Bed Bath & Beyond workers have been furloughed since early April. Bed Bath & Beyond stock, which ended 2019 worth more than $17 per share, fell to under $4 per share in April and was worth less than $6 per share as of early May.

10. Hertz

• Industry: Car Rental

With nonessential travel all but canceled, car rental company Hertz is struggling with a lack of income. The company was reportedly considering bankruptcy to restructure an estimated $17 billion in debt, according to the Wall Street Journal.

Hertz reached an agreement with its lenders that would give it until May 22 to "develop a financing strategy and structure that better reflects the economic impact of the COVID-19 global pandemic," the company said in a filing. Hertz announced a plan cut nearly 10,000 jobs in April, but the company still failed to make some lease payments that month.

11. Steak 'n Shake

• Industry: Restaurant

Just before the coronavirus shut down much of the U.S. economy, Steak 'n Shake was already closing restaurants. Facing declining sales, the burger chain temporarily closed over 100 locations in February to convert them into counter-service only restaurants to save on labor costs associated with having a waitstaff. The company reported an operating loss of $18.6 million in 2019.

Steak 'n Shake is seen as a bankruptcy risk because of its restaurant closures and the resulting lost cash flow, as well as the struggles associated with operating during the COVID-19 crisis and the coming maturity of a $181.5 million loan in 2021.

12. Nordstrom

• Industry: Clothing

Like many other retailers, department store chain Nordstrom has been in trouble since governments nationwide ordered the closure of nonessential businesses. The company shut down all of its physical stores and furloughed the majority of its workforce.

On April 8, Nordstrom issued a note to investors about the impacts the COVID-19 pandemic had on its operations. In the note, the company said, "The longer our stores remain closed to the public, the greater impact it will have on our results of operations and financial condition, and if our physical locations remain closed to customers for an extended period of time our financial situation could become distressed." On May 6, the company announced it would be closing 16 locations permanently in nine states and Puerto Rico.

13. GNC Holdings

• Industry: Health and fitness products

Even though food products have been in high demand during the pandemic, nutrition-related products seller GNC has not been able to capitalize – in part because it relies heavily on in-person sales instead of online sales. GNC furloughed "a significant portion" of its 12,400 employees, and the company's credit rating was also recently downgraded by rating agency Fitch.

GNC's stock, which was over $2 per share in mid-February, has fallen to below 60 cents as of early May, with the NYSE threatening to delist GNC as the stock has traded at under $1 per share for more than a month. GNC could also face a class action lawsuit after a law firm announced it was investigating the company's board for "fraud and breach of fiduciary duty," claiming board members would reap the benefits of any bankruptcy that results at the expense of shareholders.

14. Ruby Tuesday

• Industry: Restaurant

Casual dining restaurant chain Ruby Tuesday had been struggling financially long before the COVID-19 pandemic forced the nation's restaurants to temporarily close. The company's nationwide presence has been declining for years – from 945 U.S. locations in 2007 to less than 500 today. As the nationwide lockdown continues, already a number of closed Ruby Tuesday locations have announced that they will not be reopening.

15. Gold's Gym

• Industry: Fitness

Bans on crowds of more than 10 people across the nation spelled disaster for large gym chains like Gold's Gym. The gym company filed for bankruptcy in early May. CEO Adam Zeitsiff pledged that Gold's Gym would reopen but it already had to permanently close 30 company-owned locations amid the pandemic.

Some Gold's Gym locations have begun reopening, with enhanced safety measures in place. Still, it remains to be seen how willing consumers will be to share a confined space after turning to at-home alternatives like Peloton, which has skyrocketed in popularity since social distancing measures have been implemented.

16. Chesapeake

• Industry: Energy

The global oil industry has been devastated by a historic plummet in oil prices stemming from a lack of demand during the global shutdown and a price war between Russia and Saudi Arabia. In April, the price of West Texas Intermediate oil futures set for May fell below zero for the first time. A number of smaller oil operations are at risk of going under, and even larger energy companies are at risk.

Reuters reported on April 30 that Chesapeake Energy, a shale gas drilling company that was one of the biggest beneficiaries of the fracking boom in the United States, is preparing to file for bankruptcy.

17. Norwegian Cruise Line

• Industry: Cruise

Norwegian Cruise Line, headquartered in Miami, said in a May 5 filing there was "substantial doubt about the Company's ability to continue" as a result of COVID-19. The cruise industry has taken a beating since the Grand Princess cruise ship became one of the earliest major outbreaks among Americans in late February.

Before that incident, Norwegian Cruise Line stock traded at more than $50 per share. As of May 8, the stock was trading below $13 per share. All U.S. cruises were hit with a no-sail order, and Norwegian suspended all voyages through the end of June.

18. Dave & Buster's

• Industry: Restaurant

Unlike many other businesses that offer food, Dave & Buster's relies on customers coming inside and paying for arcade games. Games and other amusements account for almost 60% of the restaurant and entertainment company's revenue. Even when locations begin to reopen, customers may be hesitant to come back and use games that others have touched.

Dave & Buster's in April furloughed over 15,000 employees and did not pay rent. As of May 8, the company's stock price was less than a quarter of its share price of $46 in mid-February. To help bolster its financials, the company announced an agreement to sell $100 million in stock to Jefferies LLC.

19. Party City

• Industry: Retail

With in-person events canceled nationwide, Party City's potential earnings have virtually evaporated. Since the pandemic hit, the company's stock price has hovered between 50 and 60 cents per share, down from nearly $3 per share in late February. The party-supplies manufacturer and retailer furloughed 90% of in-store workers and 70% of manufacturing and corporate employees. As of early May, all retail locations remained closed, and there is no word as to when they would reopen, though some locations are offering curbside pickup.

20. Modell's Sporting Goods

• Industry: Sporting goods

While many of the companies listed here are hoping to survive the coronavirus crisis, Modell's Sporting Goods is already gone for good. After more than a century in business, the sporting goods retailer announced in March it filed for bankruptcy and would close all stores. Ironically, the pandemic may actually keep Modell's open longer, as the company said it halted its liquidation amid the closure of nonessential businesses. It is now seeking to postpone its bankruptcy through the end of May.

It could be difficult for Modell's to sell merchandise if pro and amateur leagues are still not operating. Complicating matters, Modell's only operates in the Northeast, where communities have been especially hard-hit by coronavirus.

21. Best Buy

• Industry: Consumer electronics and appliances

Consumer electronics retail giant Best Buy is one of many brick-and-mortar chains that could potentially face bankruptcy during the COVID-19 crisis. Though the company reported a surge in sales of home appliances like freezers at the beginning of the outbreak, Best Buy reported a 5% decline year-over-year in sales for the nine-week period ending April 4, 2020. On April 19, Best Buy furloughed some 51,000 employees, implemented substantial executive pay cuts, and did away with several benefits for employees.

In mid-March, Best Buy suspended appliance installation service and reduced its physical location sales services to curbside pickup only. The company has yet to reinstate normal in-store shopping.

22. Revlon

• Industry: Cosmetics

New York-based cosmetics company Revlon has reportedly been able to close a $1.8 billion refinancing package that would restructure most of its debt, according to The Business of Fashion. Revlon has been struggling with declining revenue during the coronavirus pandemic and in addition to refinancing, the company arranged a $65 million revolving credit facility in order to improve liquidity. Revlon also announced cost cutting measures, the majority of which will come in the form of layoffs. The company is one of many in an industry that has faced reduced demand even before COVID-19 has kept most Americans confined to their homes.

23. Gogo

• Industry: Communication services

Gogo is an in-flight broadband connectivity provider based in Chicago. As nonessential travel has been effectively halted during the COVID-19 pandemic and airlines have grounded many of their planes, the company's revenue has also taken a hit. As a result, in late April, the company announced plans to furlough 60% of its workforce – a total of about 600 employees. Executive pay at the company was also slashed. CEO Oakleigh Thorne said in a statement that these cuts were necessary to ensure the long-term health of the business.

24/7 Wall Street is a USA TODAY content partner offering financial news and commentary. Its content is produced independently of USA TODAY.

Premarket stocks: Companies are hoovering up cheap cash while ...

A version of this story first appeared in CNN Business’ Before the Bell newsletter. Not a subscriber? You can sign up right here. You can listen to an audio version of the newsletter by clicking the same link.

London CNN Business —

For companies that want to take advantage of historically-low borrowing costs, the clock is ticking.

What’s happening: In the early days of the year, corporations have been racing to issue debt. Their aim is to tap the market before the Federal Reserve starts hiking interest rates, which have been near zero since the start of the pandemic.

In the US market, companies raised almost $96 billion through Wednesday, according to data from Refinitiv. That’s the strongest start to the year on records dating back to 2003.

“The funding that we’ve seen in just the first [weeks] of the year has been big, and it not only reflects issuers trying to get ahead of their competition, but also that rates could be 1 [percentage point] higher or more by the end of the year,” Bank of America credit strategist Barnaby Martin told me. “This is a very different dynamic than the past few years.”

The Federal Reserve has indicated it could raise interest rates three times in 2022, though many on Wall Street now expect four hikes or more to rein in price increases (more on that below). Some policymakers have indicated they’re not opposed.

“I currently have three increases in for this year, and I’d be very open to starting in March,” Patrick Harker, president of the Federal Reserve Bank of Philadelphia, told the Financial Times in an interview published Thursday. “I’d be open to more if that’s required.”

Notable issuers in January include car companies like General Motors (GM) and Ford (F), Caterpillar (CAT), Deere (DE), insurer MetLife and Dick’s Sporting Goods (DKS), per Refinitiv.

The rush has been evident in the United States and in Europe, Martin said. It’s built on a realization that even if borrowing costs remain low by historical standards, access to capital is only going to get more expensive.

“If rates really are on the rise from here, then we’ve seen the best of financing for companies,” Martin said.

Blue-chip companies with strong credit ratings have been leading the charge, according to Martin. But some issuers with lower ratings have also managed to get in on the action, even though such deals typically take longer to stand up. Cruise line Royal Caribbean (RCL) closed a $1 billion offering last week.

AMC Entertainment (AMC) CEO Adam Aron took the unusual step of airing his interest in heading to debt markets on Twitter recently. He said his “new year’s resolution for AMC” was to refinance some of the struggling movie theater chain’s debt to reduce interest expenses and strengthen its balance sheet.

Looking ahead: Corporate borrowing is expected to taper off later this year after a brisk start. Paul Watters, head of credit research for S&P Global Ratings in Europe, told me that non-financial corporate issuance is expected to drop by about 7% globally in 2022.

One factor is that refinancing will be less attractive once rates begin to rise, Watters said. Companies also already have plenty of cash on hands thanks to the friendly environment for borrowing over the past two years. Additionally, China is trying to reduce corporate reliance on debt financing to limit risks to its economy.

Taken together, that could lead to a weaker 12 months. But for now, the rush is on. Companies will definitely be encouraged by their bankers to “consider front-loading issuance activity” with an eye toward rising rates, Watters said.

Inflation rises at the fastest clip in nearly four decades

US consumer prices rose at the fastest pace in 39 years in December, supercharging expectations that the Fed may need to respond more aggressively to rein in inflation.

The latest: The US Consumer Price Index rose 7% over the past year, its steepest climb since June 1982, the Bureau of Labor Statistics reported Wednesday.

Stripping out food and energy costs, which tend to be more volatile, inflation jumped 5.5% over the past year, the highest rise since 1991. That’s a sharp uptick compared to the previous month’s reading of 4.9%.

The data is feeding predictions on Wall Street that the Fed could hike interest rates more than three times in 2022. That’s driving up yields on US government bonds.

Mark Haefele, chief investment officer at UBS Global Wealth Management, told clients that the bank expects the yield on benchmark 10-year US Treasuries to climb to 2% “over the coming months, as investors digest the Fed’s more hawkish stance along with further elevated inflation readings.”

The yield on 10-year notes was at nearly 1.75% early Thursday, up from closer to 1.5% at the start of the year.

But Haefele doesn’t think that the rise in yields, which historically has encouraged investors to pull money from the stock market, will “imperil the equity rally,” noting that “year-over- year inflation is still likely to peak in the first quarter and recede over the year.”

Here comes the first big IPO of the year

Private equity firm TPG is about to make its Wall Street debut, the first major initial public offering of the year.

Details, details: The company priced its shares at $29.50 each, raising $1 billion. They’re expected to start trading Thursday on the Nasdaq under the ticker “TPG.”

Investor demand for TPG’s stock could send a signal to other companies that are debating whether to move ahead with public offerings at a delicate moment.

On Wednesday, HR software company Justworks delayed its IPO. It attributed the decision to market conditions.

The global IPO market had a record-breaking 2021. But companies are nervous about going public as investors reassess their commitment to risky bets due to expectations interest rates will soon be on the rise.

In a report published late last year, EY said that while strong IPO momentum is still expected in 2022, companies should “remain flexible with a plan B in place to meet financing needs in case the IPO timetable is delayed.”

“It will be imperative for IPO-bound companies to adopt a resilient and flexible strategy that is able to adapt to shifting market conditions,” said Paul Go, EY’s global IPO leader.

Up next

Delta Air Lines (DAL) reports results before US markets open.

Also today: Initial US jobless claims for last week and a report on US producer prices for December arrive at 8:30 a.m. ET.

Coming tomorrow: Earnings from BlackRock (BLK), Citigroup (C), JPMorgan Chase (JPM) and Wells Fargo (WFC).