Closures, instability still plague local retail scene

With the COVID-19 pandemic still lingering, more large retail chains are filing for bankruptcy and potentially leaving behind empty storefronts in Southeast Texas while local businesses owners try to adapt in order to avoid a similar fate.

The third week of August was a tough one for chain retailers with locations in Southeast Texas, as three different companies announced their bankruptcy filings.

Houston’s Stage Stores, which closed out the last holiday season with a huge sale in preparation for turning all of its stores to the discount Gordmans model, officially folded earlier in the week.

It tried to muster hiring fairs in Vidor and Beaumont through March, but met scheduling issues and problems recruiting staff because of the pandemic.

It joined Stein Mart on the growing list of soon-to-be empty stores in Southeast Texas, as the company announced its own bankruptcy last week.

The company tried to revamp its brand with new offerings and even partnered with Amazon to offer pickup services in locations like the Beaumont store.

Beaumont’s own Parkdale Mall also faces challenges ahead. Its parent company, Chattanooga, Tennessee-based CBL Properties, announced on Aug. 19 that it could soon be filing bankruptcy after reaching a restructuring agreement with some of its lenders.

It reported the current process would eliminate $900 million in debt and it would continue negotiating with the senior lenders that hold the rest of its millions in debt.

“Our goal is for this process to proceed as smoothly and as quickly as possible with no disruption to CBL’s operations,” CBL’s CEO Stephen Lebovitz said in a statement.

“Once the process is complete, we will emerge as a stronger and more stable company, with an enhanced ability to execute on our key strategies of diversifying our sources of revenue and transforming our properties from traditional enclosed malls to suburban town centers.”

The company took a large hit after it had to temporarily close 68 malls and reportedly collected only 27% of rents in April.

The pandemic and ensuing economic insecurity was the last nail in the coffin for already flagging brick and mortar retailers struggling to keep up with online behemoths like Amazon, but there are also signs that the companies still holding on may have longer to wait before customers return in full force.

The Refinitiv and Ipsos Primary Consumer Sentiment Index used to predict how likely consumers will spend money showed a 2.5% decline in consumer confidence between July and August as severe COVID-19 cases spiked in several states.

The index was at 47.1 in the latest report, a 13.5% fall from the same time last year.

As consumers deal with potential financial difficulties because of massive unemployment from the pandemic or fears about going out in public, businesses have had to adapt to keep their heads above water.

For Traci Tucker at Cottoncreek Winery in Beaumont, that might just take the form of delivering bottles of wine to customers if it helps improve her businesses outlook.

Since Gov. Greg Abbott ordered the closure of any businesses operating under a 51% liquor license, she said the winery has lost any kind of progress that might have built during the two months of limited business they had after reopening in May.

She said she has worked to integrate an online marketplace for the winery’s website that has helped make pickup orders easier and allowed her to ship wine within Texas, but it hasn’t made up for the drop in revenue from a closed tasting room.

“Frustrating is the only word that covers it,” she said. “We were on track for a record year before COVID, but now we’re not even making half of what we made in a regular year.”

The number of people picking up bottles from the winery ebbed and flowed since the closure in July, but —after Tucker joined several other winery and brewery owners to protest Abbott’s visit to Beaumont— she said customers have flocked to support the winery.

The next move is to try to keep those customers coming consistently, which is why Tucker said she is trying to develop a wine club.

The pandemic has also impacted food prices, as the U.S. Bureau of Labor Statistics reported last week, causing fluctuations in commodities and straining supply chains.

Locally, grocers are holding tight but are seeing the occasional shortage and challenges securing enough workers to meet heightened demands.

Skylar Thompson, president of Market Basket Foods, said there have been occasional cost increases for certain items, but business has mostly remained high.

“We noticed a slight dropoff when most restaurants reopened, but that didn’t last long,” he said.

“People are cooking at home in larger numbers which has increased our business.”

Some of the peaking demands have caused their own problems, like an increase in consumption of canned beverages as fewer people use soda fountains in restaurants.

Thompson said the store has started creating promotions for bottled sodas as its suppliers deal with a shortage of aluminum cans.

The Beaumont-Port Arthur MSA recorded a nearly 12% unemployment rate in July, but hiring has still been an issue for companies like Market Basket.

Thompson said there haven’t been any major issues because of a lack of available workers, but there have been some concerning trends since the beginning of the pandemic.

“Since the beginning of COVID, we’ve had higher turnover,” he said. “That said, we’ve actually seen an increase in positions, but those have mostly been part time jobs.”

[email protected]

Source Article