Notable: (Community Health Systems, Fairway Market, Nordstrom, etc.)

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Airlines. Another European airline jumps into administration (the third this year). 

Community Health Systems. This just keeps getting better and better. 

EFH. The Judge continues to perplex people. Sempra Energy jumping through hoops to get the Oncor deal done.

Fairway Market. Perhaps it will avoid its (inevitable) Chapter 22 thanks to John Catsimatidis. 

Family Offices. Long them.

Hedge Funds. Short them. Or...uh, maybe not? Wethinks the hedge fund PR machine is in overdrive. 

Nordstrom. Struggling with its attempts to go private.

Offshore Drilling. Not much of a US focus, but some are bullish. We were surprised by this. 

Payday Lenders. Peace out...if this happens.

Toys R Us. Thanks to advisory fees, perhaps the private equity sponsors didn't fare as poorly as many think.

Notable (Amazon, 3D-Printing, International Distress, Nordstrom, Taxis)

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Amazon. Losing a user experience advantage. 

3-D Printing. Remember when we said that it could be a game changer and put a lot of companies out of business? Well, adoption is growing so draw your own conclusions (firewall).

International Distress. Looks like Aurelius Capital Management has a fight on its hands in the case of Oi SA. 

Nordstrom. A take private transaction is nearing.

Taxis. There may not be a more painful user experience than the NYC taxi ride. Cramped old sticky leather seats, the distinct smell of 12-hour old vomit, a loud talkative driver who can't use or doesn't use GPS, that annoying TV Talk nonsense blabbering on and on, and air conditioning that inexplicably seems to spit out heat. But, you still have to feel for these guys, the poster-children for disruption. And now the vultures are circling looking to take advantage of desperation.

Nordstom Going Private?

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Saving Private Nordstrom

Nordstrom ($JWN) is reportedly exploring a (debt-laden) take-private transaction in partnership with one or all ofLeonard Green & Partners LP, Apollo Global Management LLC and KKR & Co. LLP. The market, broadly, is exploring shorting the bloody hell out of retail generally, and Nordstrom specifically.

A Rare Retail Surprise to the Upside

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Long-watched Claire's Stores Inc. surprised to the upside this past week asApollo Investment Corporation's operators appear to be working their magic (yes, a rare PETITION shoutout to the PE bros). The company's bonds reacted favorably and now many think that the company will manage to make it until...wait for it...at least 2018 - not exactly the greatest vote of confidence given that we're in Q3 already and most retailers are gonna want to give the holiday season a spin (unless we're talking about Gymboree). Elsewhere, Nordstrom ($JWN) is talking a go-private transaction.

Much Needed Board Evolution (in Retail)

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Last week we noted that a number of retailers may be struggling because their boards are comprised of stodgy old white dudes who don't know a thing about tech. We noted a few exceptions. It sounds like Nordstrom Inc. ($JWN) got the memo by adding Stacy Brown-Philpot to its board. With her experience as CEO of TaskRabbit, she should add some much needed tech know-how and diversity of perspective to the retailer.

News for the Week of 2/26/17

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  • Busted Startups. Here, Beepi. Despite $150mm of VC and a last raise at a $564 valuation, the used-car marketplace is selling for parts, with Sherwood Partners acting as assignee. With auto-lending for new cars at subprime levels, this capitulation isn't all-too surprising.
  • Busted Startups II. Some argue that part of the failing brick-and-mortar narrative relates to delivery services like Birchbox. Maybe not. Trunk Club sold to Nordstrom and has languished and now JackThreads looks like it's worth JackSh*t. 
  • Clean Energy. Challenges. But progress with storage.
  • Disruption. The fall of Blackberry.
  • Distressed Investing. In malls. These guys have cajones.
  • Greece. Remember the bailout controversies that sent the markets into a tizzy a few years back? Yeah, they're back. Europe looks staged for a lot of volatility in coming months with elections looming in France and Germany. This could create some real interesting investment opportunities. Of course, that's what people said of Brexit, too.
  • Power. Maybe. Maybe not. This week the denials poured down from Toshiba re: Westinghouse. Meanwhile, FirstEnergy drops some bombs in its investor presentation.
  • Restaurants. Five chains that look like dogsh*t in 2017.
  • Retail. Apparently President Trump's promises to make America great again did not take into account all of the vitriol that would be unleashed towards his brands and resulting domino effect: case and point, Perfumania, which was teetering BEFORE folks wanted to wash themselves of the Trump stank. Speaking of mall-based stench, L Brands' Victoria's Secret ain't looking so hot these days as forward guidance looked bleak. And Amazon announced the release of its discount bras. Cue Jaws theme song.
  • Retail II. People have been talking about Toys R' Us for years and in '16 they took steps to deal with the over-levered balance sheet. The company continues to cut costs on the ops side too. Meanwhile, other companies like J.Crew are engaging in Intellectual Property machinations to stave off the inevitable and raise financing - the legality of which remains an open question.
  • Retail III - Department Stores. AlixPartners makes a cameo appearance in this interesting summary of the state of department stores. Choice stat: "As recently as 1999, department stores had total sales of $230 billion. Last year they came in at $155.5 billion, according to Census data." Accordingly, JC Penney is closing 140 stores (and probably still has 300 too many) and Sears is continuing to cut costs with 130 HQ firings. On point, Macy's reported numbers this past week. And so did Walmart - and the market initially responded in a way that is a smack to Warren Buffett (see last week's newsletter). Meanwhile TJX Cos. (TJ Maxx, Home Goods, Marshalls) showed that brick-and-mortar still has some legs (as did Nordstrom).
  • Fast Forward: Ocean Rig acknowledged that it's effed and the stock took a dive: a possible bankruptcy is on the horizon. And Cumulus Media had a setback in its efforts to restructure.
  • Rewind I: Sporting goods - analysts are starting to notice the massive bloodbath and, accordingly, downgraded Dick's Sporting Goods.
  • Rewind II: Let's hope that Sycamore Partners' purchase of The Limited fares better than Versa Capital Management's investment in Eastern Outfitters. $26.8mm price tag. Meanwhile, Wet Seal is available.
  • Chart of the Week: 
  • Tweet of the Week:

News for the Week of 11/13/16

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  • Fast Forward: Bonanza Creek, Forbes Energy and Nuverra Environmental all face expirations of grace/forbearance periods this week. 
  • Fast Forward II: Dynergy and Illinois Power Generating Co. (Genco) launched an exchange offer for Genco with a prepackaged bankruptcy backstop; FirstEnergy bonds plummeted after acknowledging bankruptcy as an option for subsidiary, FirstEnergy Solutions.
  • Rewind I: Saudi Arabia. Feeling the pain.
  • Rewind II: Oklahoma. Two weeks ago we highlighted the effects of the oil and gas downturn on the educational system in Oklahoma. We acknowledged the environmental issues there too. Well, that story keeps evolving as a 5.0 earthquake roiled through Oklahoma this past week.  And this chart is interesting:
  • Chart of the Week: US field production of crude oil increased in 2015 for the 7th consecutive year to 9.42mm barrels/day, the highest crude oil production level since 1972. (Source: U.S. Energy Information Administration).