The total collapse of businesses is shocking.
Look At The Total Collapse Of Businesses
August 19 (King World News) – Gerald Celente: Each week we highlight how the COVID War waged by politicians has destroyed market sectors and devastated business. Here are some of the latest companies that have taken an economic hit.
CISCO SYSTEMS MAKES CUTS. The network equipment company will cut more than $1 billion in costs over the next several quarters and offer early retirement to workers after posting a 9-percent drop in second-quarter sales and its first annual revenue decline since 2017.
The company also will refocus its research and development to emphasize security and cloud computing.
STEIN MART GOES BUST. The 112-year-old chain selling clothing and linens filed for Chapter 11 bankruptcy on 5 August.
The company will close “a significant portion, if not all” of its more than 250 stores, located in California, Texas, and the U.S. southeast and is considering selling its website and intellectual property.
Stein Mart disclosed in a June regulatory filing that there were substantial doubts about its ability to continue.
The company employs about 8,000 people.
RIDE-HAILING COMPANIES IN THE BREAKDOWN LANE. Lyft gave 8.7 million rides in the second quarter, compared to 21.2 million during the first three months of this year. Revenue for the period sank to $339.3 million from $867.3 million in 2019’s second quarter.
Lyft also reported July’s rides rose 78 percent from their April trough but revenues for the month still were 54 percent below those a year previous. It also posted revenue growth in its bicycle-sharing division…
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Uber reported a 75-percent drop in the number of rides in the second quarter, compared to the same period in 2019, and a 72-percent slide from this year’s first quarter.
Uber’s losses were buffered by its food delivery operations.
Lyft began delivering groceries and medical supplies during the most recent quarter to add revenue streams.
Both companies were dealt an additional blow on 10 August when a California judge ruled the state’s law governing gig workers requires the ride services to classify their drivers as employees instead of independent contractors.
The companies are expected to appeal.
CO-WORKING SPACES NO LONGER WORK. Knotel, WeWork, and other companies renting shared office space to start-ups and gig workers are closing down locations around the world as contractors lose work, young companies lose investors, and everyone seeks ways to cut costs.
IWG, with more flexible office locations than any other company in the industry, reported closing 32 locations around the world during the first half of this year due to the economic shutdown. It will close another 100 before 2021, it said, with the two rounds of closures shutting down about 4 percent of its total space.
The company creates a separate business entity for each of its locations and has ended several leases by putting individual entities into bankruptcy in Columbus, Chapel Hill, Chicago, Columbus, OH, and Ft. Lauderdale.
Knotel’s revenue fell 20 percent in the second quarter. The company has bought out some of its leases and will shut down about 20 percent of its spaces.
Before the pandemic struck, WeWork was struggling to end leases and shut down a number of its locales around the world.
Property owners are suing Knotel, WeWork, and other flexible-office companies for back rent and other lease violations…
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About 20 percent, or 25 million square feet, of the U.S.’s 4,500 shared office spaces will close or be taken over by other owners this year, according to estimates by real estate brokerage JLL.
Industry executives see future hope as companies send executives to work at home; home workers will need an occasional refuge to meet or concentrate, they say.
This business sector was already in a downdraft before government lockdowns. With more people going out of work and with more people working at home, the WeWork’s of the world will shrink in size, go deeper in debt…and many will go bankrupt.
RENT THE RUNWAY CLOSES ALL RETAIL STORES. The fashion rental service laid off its retail employees and closed all five physical stores in March and now will not reopen them, the company said.
The stores were in Chicago; Los Angeles; NYC; San Francisco; and Washington, D.C.
The closures were accelerated by the shutdown but were planned before the pandemic struck, said CEO Anushka Salinas. She described the shutdowns as “part of the evolution of our overall business strategy.”
The company is a subscription service that customers use to borrow fancy clothes for special events or work. Since the shutdown, Rent the Runway has shifted its inventory to feature more casual attire.
Most customers visiting the five stores were there only to return the clothes they had borrowed online. The company is mulling the possibility of adding drop boxes for returned clothing at locations closer to customers’ homes.
TAK ROOM CLOSES. Chef Thomas Keller is closing his TAK Room restaurant, one to the key attractions of Manhattan’s Hudson Yards, a $25-billion culinary West Side destination complex.
In permanently closing his restaurant and Bouchon Bakery, Keller said the economic shutdown “has done irreparable damage to our business and profession.”
Because now-vanished tourists were the main customers at Hudson Yards, “we could not find an economic path to continue operating,” he said.
The fact that Keller, one of America’s most celebrated chefs, had to close “shows… that no one is invincible,” noted New York restaurant consultant Arlene Spiegel.
CARLSBERG BEER BLUES. Carlsberg, the world’s third-largest brewer, said operating profits will fall 10 to 15 percent this year, after sliding 8.9 percent in the first half.
The company forecasts operating profits will dive 17 percent during the second half.
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