Retail stores and businesses are generally free to develop their own policies regarding acceptance or non-acceptance of certain forms of payment. For years, many small businesses have refused credit card payments entirely or credit card payments for transactions under a certain amount due to high transaction costs. Smaller retailers may also refuse certain brands of credit cards. However, a different trend has emerged in recent years as an increasing number of retailers are refusing to accept cash and instead accepting only credit/debit and smartphone payments.
The rise of e-commerce and the struggle many brick-and-mortar retail stores face is nothing new. Customers are increasingly choosing to shop for clothes, furniture and even groceries from the convenience of their own homes. More recently, however, this shift in the way consumers shop has given rise to new types of retail stores – small showrooms and “pop-up shops.” While showrooms are not entirely new concepts, purely digital companies are increasingly opening up physical showrooms where customers can see and touch merchandise before deciding to buy, while the actual transactions often remain online. Pop-up shops – another retail store model – allow retailers (often online or seasonal retailers) to have a physical presence for a limited duration to essentially test run whether a permanent store would be lucrative. Continue Reading From Digital to Physical: New Considerations for Retail Leasing with the Rise of E-Commerce into Physical Spaces
Most retail tenants desire to locate their respective businesses amongst other retail businesses in malls, retail shopping centers or other mixed-use centers. Therefore, when negotiating retail leases, some of the most heavily discussed provisions involve the tenant’s share of Common Area Maintenance (“CAM”) expenses. CAM expenses essentially determine how much money a tenant will contribute to the upkeep and maintenance of the surrounding shopping center owned by the landlord. Continue Reading Considerations When Negotiating Common Area Maintenance Costs in Retail Leases
Due to volatile and record-breaking valuations, cryptocurrencies and their underlying technology, blockchain, have been at the forefront of financial news headlines. Blockchain technology is, very simply, a decentralized digital ledger that records economic transactions in a way that cannot be copied or destroyed, therefore eliminating fraudulent or duplicative transactions. Bitcoin is perhaps the best known cryptocurrency, and for which blockchain technology was invented. Bitcoins are discovered through “mining,” a process whereby computers use processing power to solve difficult puzzles. The miner who finds the solution receives bitcoins, essentially digital tokens, as a reward. Unlike traditional currencies, bitcoin and other cryptocurrencies do not require a third party or central authority for its users to transfer value. Continue Reading Cryptocurrency and the Concern for Retailers
Leveraged loans may have a role in recent retail bankruptcies. Leveraged loan volume is nearing pre-recession highs and is on track to surpass 2007 levels, concerning many regulators and investors. Leveraged loans are typically offered to companies that already have large amounts of debt, and therefore, leveraged loans carry higher interest rates due to an increased risk of borrower default. Companies often use leveraged loans to finance mergers, refinance debt or for general company purposes. Private equity firms also utilize leveraged loans in order to fund takeovers of companies, including struggling retailers. Loans issued to fund leveraged buyouts from private equity firms rose 74 percent in 2017 and totaled 88.5 billion dollars. Additionally, nearly a third of loans to companies backed by private equity firms are leveraged six times or more. Continue Reading Leveraged Loans Raise Bankruptcy Fears
At the end of May, President Trump unveiled his latest proposed budget blueprint for 2018. The proposed budget contains significant funding cuts for many government programs, including more than a 25 percent cut to the Supplemental Nutrition Assistance Program (“SNAP”), formerly known as the Food Stamp Program. Continue Reading Proposed Budget Cut to the Food Stamp Program Worries Many Food Retailers
Many online retailers are exploring how to use drones to quickly deliver online orders to customers. In June 2016, the Federal Aviation Administration (“FAA”) issued a final rule permitting flights by commercial drones under certain conditions, including the drone and its cargo weigh less than 55 pounds and the drone stays within sight of the pilot. While the rule was a welcome step forward for the commercial drone industry, the operational restrictions prohibited drones to fly over any populated areas due to safety concerns, essentially forbidding commercial drones in most urban areas. Continue Reading Retailers Await New Drone Regulations Amid Trump Administration Regulation Freeze
Traditional shopping malls across the country are facing a decreasing amount of customers, declining profits, and, in certain cases, overall viability. Though numerous specialty malls continue to be quite profitable, many regional shopping malls are not as fortunate. Online retailers dominate an ever increasing share of the retail market, and the retailers that have traditionally made up mall tenants may no longer see the value in as many, or any, brick and mortar stores. Due in large part to the convenience and success of online retailers, American consumers generally spend less time shopping at brick and mortar stores, opting instead to shop from their computers or other media devices. In response, and out of necessity, major department stores have dramatically consolidated their number of locations over the past few years. Regional malls anchored by troubled department stores such as Sears and Macy’s are perhaps faring the worst. Continue Reading Many CMBS Loans Due to Mature as Retail Shopping Malls Struggle
If you live in an urban environment, you have likely seen food trucks on city streets, in parking lots or at any number of local events. The mobile food industry has grown significantly over the last few years and, with that growth, vendors and their brick-and-mortar competition have been faced with a changing regulatory landscape. Continue Reading Legal Battles Over Rights of Food Trucks
A recent flurry of Texas law changes have local and national retailers considering whether to prohibit customers from openly carrying weapons inside of their stores.
This past January, Texas’s “open carry” law went into effect, allowing gun owners to carry their weapons holstered either at their hip or on their shoulder. The Texas law does have limitations, including an exclusion banning open carry on the premises of restaurants and bars that make more than 51 percent of their gross profits from alcohol sales, and, significant for retailers, a provision that allows businesses to prohibit open carry on their premises, as long as they post certain specified signage alerting customers of the ban.