business news in context, analysis with attitude

With brief, occasional, italicized and sometimes gratuitous commentary…

From Business Insider:

"The US Supreme Court has given the Mall of America a chance to get out of a deal that it made more than 30 years ago to lease space to Sears for just $10 a year … The matter dates back to 1991, when the biggest shopping mall in the US was lining up tenants for its grand opening. For one of its four anchor stores, the Mall of America booked what at the time appeared to be a can't-lose deal with an icon of American retail: Sears.

"The deal gave Sears a 100-year lease on a 120,000-square foot space spanning three floors at the Bloomington, Minnesota, mall for less than a dollar per month."

Two decades later, that didn't seem like such a good deal as Sears' prospects faded because of mismanagement and an inability to meet shopper expectations and keep up with consumer trends.  In 2018, the retailer closed its Mall of America store.

But:  "As part of its reorganization, Sears sold $5.2 billion of its assets to its former chairman's hedge fund, which placed them under a company called Transform Holdco. Sears later told the bankruptcy court that it wanted to transfer its lease on the Mall of America store to Transform Holdco, so that another Transform subsidiary could sublet the $10-per-year space to new tenants – presumably at a higher price to pocket the difference."

Mall of America objected.  While the bankruptcy court disagreed and an appeals court said that appeals were not allowed in such cases, the mall's management appealed that decision all the way to the Supreme Court, which now has said that Mall of America can appeal.  "In other words, the Mall of America isn't getting the newly negotiated lease it wants on the highly prized space, but it is allowed to continue fighting for it," Business Insider writes.

Gee, what a surprise that Fast Eddie Lampert would pull something like this - turn his own mismanagement of Sears into a real estate killing.  I'm shocked.


•  From Reuters:

"IKEA stores owner Ingka Group will spend 2 billion euros ($2.2 billion) expanding in the United States over the next three years, its biggest investment in a single country, in a bet to win American customers as other big-box retailers close stores.

"Sweden's IKEA, which opened its first U.S. store in 1985, near Philadelphia, is seeking to win market share in the U.S. as cash-strapped consumers look for more affordable products."

The plan is "to open eight new big IKEA stores and nine smaller stores as well as upgrading existing stores in the U.S., which is IKEA's second-biggest market by sales after Germany, the company said on Thursday … Specific locations for the stores had not yet been decided. The new stores, including nine 'plan and order points,' smaller stores where customers can get advice and order furniture for delivery, are in addition to already planned IKEA openings in downtown San Francisco and in Arlington, Virginia."

I've always liked the small store IKEA format, and did a piece about it, pre-pandemic, which you can see here.


•  Another tough story about urban dysfunction:

KOIN-TV reports that "just a week before its grand opening, the Shake Shack location in downtown Portland was vandalized … Earlier this week, officers responded to the location at 1016 Burnside Street where a window was smashed. It doesn’t appear the vandal was hungry for a burger as PPB says there’s no evidence anyone entered the business."

The Shake Shack was scheduled to open next week.  It is located at the edge of the Pearl District, the same neighborhood where REI said that it plans to close its store there because of crime and concerns about customer and employee safety.

Again, my heart breaks for the city that I used to think of as my home away from home.  And I'm outraged by the situation.


•  From the Financial Times:

"Tesco may have to stop using its Clubcard logo in its current form after discounter Lidl won a trademark lawsuit against the UK grocer over the use of a yellow circle on a blue square.  London’s High Court has ruled in Lidl’s favour and will issue an injunction ordering the UK’s largest supermarket to cease using its Clubcard logo, Lidl said in a statement.

"However Tesco will ask the Court to pause any requirements to change its logo until an appeal is heard. Lidl had sued Tesco for infringement, passing off and copyright, claiming that the group had used a blue square with a centred yellow circle to promote its Clubcard scheme, which was too similar to its own Lidl logo. Tesco had disputed the claim and brought a counterclaim against Lidl seeking to cancel some of the trademarks and saying some of Lidl’s trademarks were invalid."

It is, FT writes, a reflection of "the fierce battle for market share among supermarkets as consumers struggle with the cost of living crisis."