%1

Stein Mart Inc. has filed for bankruptcy with plans to permanently close all or most stores, becoming the latest distressed retailer to succumb to the economic fallout caused by restrictions due to the coronavirus pandemic, WSJ Pro Bankruptcy reported. The discount department-store chain, which has locations nationwide, filed for chapter 11 protection on Wednesday in U.S. Bankruptcy Court in Jacksonville, Fla. Stein Mart said it is evaluating strategic alternatives, including the potential sale of its e-commerce business and related intellectual property. The decision to file for bankruptcy comes after the publicly traded company raised substantial doubt in June about its ability to stay in business over the next 12 months due to the pandemic’s adverse effects on revenue, operations and cash flow. Stein Mart’s sales had been under pressure since 2016, but COVID-19 further hurt the company’s business due to lower in-store traffic that strained its credit facilities, as it borrowed seasonally higher amounts to cover cash shortfalls from lower sales.

Investor Carl Icahn’s bet on the downfall of brick-and-mortar retailers produced a $1.3 billion gain during the first half of the year, Bloomberg News reported. The profit came from a short position on commercial mortgage backed securities, Icahn Enterprises LP said on Monday in a regulatory filing. Icahn’s publicly traded holding company has committed capital to his proprietary investment funds and thus reports on their returns quarterly. Icahn began making the bet, frequently called the “mall short,” in mid-2019 by purchasing credit default insurance using CMBX 6, an index highly exposed to shopping mall loans. The likelihood of defaults soared in March as the COVID-19 pandemic led to store closures and prompted more consumers to shop online, accelerating a trend already well underway. Icahn has shied away from specifying the exact size of the position, though he told Bloomberg in April, “We have billions and billions on the short side of this.” As of July 3, traders had wagered a net $8.3 billion on the BBB- slice of CMBX 6 and an additional $2.2 billion on the junk-rated portion of the index, according to the International Swaps & Derivatives Association. Icahn’s investment unit generated an 11.7 percent gain during the second quarter and a loss of 7.9 percent in the six months, according to the filing. Icahn’s six-year bet on Hertz Global Holdings Inc. came to an end with a loss of almost $1.6 billion when the rental-car company filed for bankruptcy protection in May.

The world’s biggest coworking companies are starting to close money-losing locations across the globe, signaling an end to years of expansion in what had been one of real estate’s hottest sectors, the Wall Street Journal reported. The retreat reflects an effort to slash costs at a time when the coronavirus is reducing demand for office space, and perhaps for years to come. It also shows how bigger coworking firms, in a race to sign as many leases as possible and grab market share, overexpanded and became saddled with debt and expensive leases. The share of coworking spaces that have closed is still small. In the first half of the year, closures accounted for just 1.5 percent of the space occupied by flexible-office companies in the 20 biggest U.S. markets, according to CBRE Group Inc. Scott Homa, head of office research at brokerage JLL, says the impact has been modest partly because some operators have been able to get rent relief and because closing locations takes time. But JLL estimates that of the roughly 4,500 coworking locations in the U.S. a fifth, or about 25 million square feet, will likely close or change operators. IWG PLC, the world’s biggest flexible-office firm by number of locations, said recently that it had closed 32 locations in the first half of this year because of the coronavirus pandemic. The company plans to close around 100 locations in the second half of the year, or 4 percent of its total spaces, according to its chief executive, Mark Dixon.

The world’s biggest coworking companies are starting to close money-losing locations across the globe, signaling an end to years of expansion in what had been one of real estate’s hottest sectors, the Wall Street Journal reported. The retreat reflects an effort to slash costs at a time when the coronavirus is reducing demand for office space, and perhaps for years to come. It also shows how bigger coworking firms, in a race to sign as many leases as possible and grab market share, overexpanded and became saddled with debt and expensive leases. The share of coworking spaces that have closed is still small. In the first half of the year, closures accounted for just 1.5 percent of the space occupied by flexible-office companies in the 20 biggest U.S. markets, according to CBRE Group Inc. Scott Homa, head of office research at brokerage JLL, says the impact has been modest partly because some operators have been able to get rent relief and because closing locations takes time. But JLL estimates that of the roughly 4,500 coworking locations in the U.S. a fifth, or about 25 million square feet, will likely close or change operators. IWG PLC, the world’s biggest flexible-office firm by number of locations, said recently that it had closed 32 locations in the first half of this year because of the coronavirus pandemic. The company plans to close around 100 locations in the second half of the year, or 4 percent of its total spaces, according to its chief executive, Mark Dixon.

President Donald Trump said yesterday that he may take executive action to impose a moratorium on evictions and to enact a payroll tax holiday, with talks on a new virus-relief plan making slow progress in Congress, Bloomberg News reported. The White House is also exploring whether the president can act on his own to extend enhanced unemployment insurance payments that, like an eviction moratorium, were part of stimulus legislation enacted in March but now have expired. Later, Trump told reporters that he’s discussing suspending payroll taxes through an executive action. Trump spoke while Treasury Secretary Steven Mnuchin and Trump’s chief of staff, Mark Meadows, met at the Capitol with House Speaker Nancy Pelosi and Senate Democratic leader Chuck Schumer. Both sides said after the two-hour meeting that they made some progress, and would convene again on today. “It was productive, we are moving down the track,” Pelosi said, adding that “we still have our differences.” The two sides are trying to close the gap between the $3.5 trillion Democratic plan passed by the House in May and the $1 trillion package of aid that Senate Republicans introduced last week.

The chairman of the Senate Banking Committee is calling on federal agencies to extend economic relief measures that Congress established in March, as lawmakers and the Trump administration struggle to reach a deal on the next round of aid, Politico reported. In a letter to housing and bank regulators, Senate Banking Chair Mike Crapo (R-Idaho) urged the officials to use their existing authority to continue eviction protections and looser lending rules — in effect doing an end run around Congress. "Although there are already early, encouraging signs that the U.S. economy is beginning to heal, federal financial regulators must remain diligent, and continue to provide relief in light of a pandemic and economic conditions that continue to evolve," he said in the letter sent Friday. Crapo sent the letter to leaders of the Federal Reserve, Office of the Comptroller of the Currency, Federal Deposit Insurance Corp., National Credit Union Administration, Department of Housing and Urban Development and the Federal Housing Finance Agency. The nature of the request suggests that Crapo believes that lawmakers might not be able to address the measures in the near future. The letter gives the agencies additional cover to take matters into their own hands. Eviction protections that Congress passed in March expired on July 24.