BIG BUSINESS BUST

Everyday brands that define the American consumer landscape lack the cash to survive for long in a shuttered economy, and they are grasping for ways to sustain themselves until customers are allowed to return.

• The Cheesecake Factory and Subway restaurant chains have notified landlords they can’t afford to pay April’s rents because their eateries have been shut down.
• General Motors drew $16 billion in cash from its credit lines last week, after Ford took $14 billion from its lines.
• German car makers Volkswagen, BMW, and Daimler are collectively bleeding fixed costs of about $400 million a day while their plants remain closed against the spread of the coronavirus.
• Oil giants Royal Dutch Shell and Total have announced emergency 20-percent cuts to their operating budgets this year as oil prices puddle at 17-year lows.
• AMC Theater Holdings, which owns 1,000 movie houses, is closing all of its theaters for up to 12 weeks. Some of the company’s bonds have been devalued to 39 cents on the dollar. AMC is likely to negotiate reduced rents from its landlords, who might hesitate in a depressed economy to evict a theater from a space unsuited to much else.
• Cardinal Health began the year with $40 billion in liabilities, 40 times its shareholder equity. The average ratio in the health care S&P 500 is 1.2, according to a Wall Street Journal
• Kimberly-Clark, which makes Kleenex and Huggies, among other staples, ended 2019 with 77 times as much liability as shareholder equity.
• Home Depot reported having only 17 days’ operating cash on hand when the pandemic’s economic crisis began.
• WeWork, the billion-dollar market darling that rents out shared office spaces in major metro areas, lost $3.6 billion in 2019. SoftBank, WeWork’s major angel, is now threatening to cancel its pledge to buy $1.3 billion of WeWork shares from other investors. The virus pandemic is likely to sharply curtail demand among gig workers for office space away from home.

TREND FORECAST: With seasonal products unsold and out of season, and closed stores stocked up with them, there will be 90 percent discounts from stores going bankrupt.
 Also, 2020 will mark the beginning of the end of “Black Friday” sales since the Economic Black Plague produced by mainstream media – and its cast of star-studded politicians – have created a business climate of product deflation unmatched in modern times.