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Future

Suitors Circling Selfridges Test Future of Post-Pandemic Retail


More than a year into the pandemic that’s dramatically changed consumer habits, one of the most prized retail assets in the U.K. is potentially coming up for sale, testing the appetite for physical outlets in an era of online shopping.

Selfridges & Co. Ltd., the luxury emporium best known for its giant department store on London’s Oxford Street, may be on the block with a 4 billion pound ($5.64 billion) price tag following an unsolicited approach, according to people familiar with the discussion. The current owner, the Canadian Weston family, has hired Credit Suisse to advise on the overture from an unidentified buyer, said the people, who asked not to be named because the deliberations aren’t yet public.

The department store is among the most famous in the world, eclipsed in London only by Harrods. While other brands have struggled or closed down entirely, Selfridges was able to withstand the downturn in recent years with its blend of cutting-edge fashion and a broad range — the shoe department is among the largest in the world and the rooftop terrace is a popular gourmet destination. A considerable part of the asset’s value lies in the real estate, which spans a large section of Oxford Street, London’s most popular shopping mile.

But the Weston clan also prides itself in its longterm approach to investments. Since gaining control of Selfridges 18 years ago, the family has invested heavily in the store. The store has outlets in Manchester and Birmingham, where Selfridges occupies a windowless space-age building vaguely reminiscent of a giant silver slug. Besides, the timing of a sale may not be ideal, said Peter Williams, the former chief executive officer of Selfridges who ran the business before the sale to the Westons.

“Oxford Street and Central London will be the last to recover from Covid because of the lack of tourists so why would you sell it now?” Williams said. “If I was in their shoes I would bat away any approach quickly as it can be a distraction and doesn’t help the running of the business. Particularly right now when everyone is working so hard to bring physical retail back to life.”

Spokesmen for Selfridges and Credit Suisse both declined to comment on the potential sale.

Expansion Drive

Founded in 1908 by Harry Gordon Selfridge, the retailer came under control of Canadian businessman Galen Weston in 2003 for almost 600 million pounds. The group has since expanded to other department store chains, including Arnotts and Brown Thomas in Ireland, Holt Renfrew in Canada and de Bijenkorf in the Netherlands. The holdings outside the U.K. and Ireland wouldn’t be included in the proposed sale, the people said.

Assessing the value of the real estate will be

Photographer: Stuart C. Wilson/Getty Images

a key part of any possible sale. A chance to own the 540,000 square foot (50,168 square meters) Beaux Arts store on Oxford Street is an attractive proposition. But it’s also become a location increasingly surrounded by vacant neighbors. Rival department stores on the U.K.’s busiest shopping street including Debenhams and House of Fraser have closed, while John Lewis is pursuing plans to convert part of its store into offices.

About 9.4% of retail space in London’s West End is now vacant, causing rents for the best central London stores to plunge by about 14% in the year through March, according to research published by U.K. property agent Savills Plc. Oxford Street rents are down almost 18% in the period, the broker’s data show. That’s hit investor demand for stores in London’s tourist heartlands, with deals in the first quarter down by almost 46% from a year earlier.

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Future

Opinion: Biden’s infrastructure plan must look to the future, not wrap itself in a nostalgic view of past American greatness


CAMBRIDGE, Mass. (Project Syndicate)—President Joe Biden’s $2 trillion infrastructure plan is likely to be a watershed moment for the American economy, clearly signaling that the neoliberal era, with its belief that markets work best and are best left alone, is behind us. But while neoliberalism may be dead, it is less clear what will replace it.

The challenges that the United States and other advanced economies face today are fundamentally different from those they faced in the early decades of the 20th century. Those earlier challenges gave rise to the New Deal and the welfare state. Today’s problems—climate change, the disruption of labor markets due to new technologies, and hyper-globalization—require new solutions.

Capitol Report: Biden says he’s ‘prepared to negotiate’ on infrastructure as he meets bipartisan group of lawmakers

We need a new economic vision, not nostalgia for a mythicized age of widely shared prosperity at home and global supremacy abroad.

On climate change, Biden’s plan falls short of the Green New Deal advocated by progressive Democrats such as Rep. Alexandria Ocasio-Cortez. But it contains significant investments in a green economy, such as supporting markets for electric vehicles and other programs to cut carbon-dioxide emissions, making it the largest federal effort ever to curb greenhouse-gases.


Economics is different from an arms race. A strong U.S. economy should not be a threat to China, just as Chinese economic growth need not threaten America.

On jobs, the plan aims to expand employment offering good pay and benefits, focusing, in addition to infrastructure, on manufacturing and the growing and essential care economy.

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The role of government

New ways of thinking about the role of government are as important as new priorities. Many commentators have framed Biden’s infrastructure plan as a return to big government. But the package is spread over eight years, will raise public spending by only 1 percentage point of gross domestic product, and is projected to pay for itself eventually.

A boost in public investment in infrastructure, the green transition, and job creation is long overdue. Even if the plan were nothing more than a big public investment push financed by taxes on large corporations, it would do a lot of good for the U.S. economy.


We need a new economic vision, not nostalgia for a mythicized age of widely shared prosperity at home and global supremacy abroad.

But Biden’s plan can be much more. It could fundamentally reshape the government’s role in the economy and how that role is perceived.

Traditional skepticism about government’s economic role is rooted in the belief that private markets, driven by the profit motive, are efficient, while governments are wasteful. But the excesses of private markets in recent decades—the rise of monopolies, the follies of private finance, extreme concentration of income, and rising economic insecurity—have taken the shine off the private sector.

At the same time, it is better understood today that in a complex economy characterized by so much uncertainty, top-down regulation is unlikely to work. Regardless of the specific domain—promoting green technologies, developing new institutional arrangements for home-care workers, deepening domestic supply chains for high-tech manufacturing, or building on successful workforce development programs—government collaboration with nongovernmental actors will be essential.


If it succeeds, the example it sets of markets and governments acting as complements, not substitutes—demonstrating that each works better when the other pulls its weight—could be its most important and enduring legacy.

In all these areas, the government will have to work with markets and private businesses, as well as other stakeholders such as unions and community groups. New models of governance will be required to ensure public objectives are pursued with the full participation of those actors who have the knowledge and capacity to achieve them. The government will have to become a trusted partner; and it will have to trust other social actors in turn.

In the past, each excessive swing in the state-market balance has eventually prompted an excessive swing in the opposite direction. The Biden plan can break this cycle. If it succeeds, the example it sets of markets and governments acting as complements, not substitutes—demonstrating that each works better when the other pulls its weight—could be its most important and enduring legacy.

Biden’s unhelpful framing

In this regard, it is unhelpful to view the Biden plan as a way to restore America’s competitive position in the world, especially vis-à-vis China. Unfortunately, Biden himself is guilty of this framing. The package will “put us in a position to win the global competition with China in the coming years,” he recently argued.

Peter Morici: Biden doesn’t understand how dangerous China is

It may be politically tempting to market the infrastructure plan in this fashion. In an earlier era, the prevailing fear that the U.S. was losing its edge to the Soviet Union in ballistic missiles and in the space race helped catalyze a national technological mobilization.

But there is much less reason for fearmongering today. It is unlikely to buy much Republican support for the plan, given the intensity of partisan polarization. And it diverts attention from the real action: if the plan increases incomes and opportunities for ordinary Americans, as it should, it will have been worth doing, regardless of the effects on America’s geopolitical status.

Moreover, economics is different from an arms race. A strong U.S. economy should not be a threat to China, just as Chinese economic growth need not threaten America. Biden’s framing is damaging insofar as it turns good economics at home into an instrument of aggressive, zero-sum policies abroad. Can we blame China if it tightens restrictions on U.S. corporations as a defensive measure against the Biden plan?

The plan could transform the U.S. and set an important example for other developed countries to follow. But to achieve its potential, it must avoid misleading state-versus-market dichotomies and outdated Cold War tropes. Only by leaving behind the models of the past can it chart a new vision for the future.

This commentary was published with permission of Project SyndicateBiden Must Fix the Future, Not the Past.

Dani Rodrik, professor of international political economy at Harvard University’s John F. Kennedy School of Government, is the author of “Straight Talk on Trade: Ideas for a Sane World Economy.”

More From Project Syndicate

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James K. Galbraith: Here’s why fears of surging inflation are off-base

Minxin Pei: China sabotages its economic future by escalating tiff with West over forced labor of Uighurs



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Reviews

Goodbye Yellow Brick Road — Thousands Leave The Bay Area – CBS San Francisco


By CBS San Francisco Staff

SAN FRANCISCO (CBS SF) — Like thousands of other tech workers, William Hauser came to the San Francisco Bay Area from Ohio seeking a bright future in the epicenter of the digital world.

There were obstacles — high rents, an ever skyrocketing cost of living, long hours at work. Then the coronavirus struck. In mid-March, tech giants including Salesforce, Apple, Google and Twitter sent their staffs home to work remotely and smaller firms followed suit. As the lockdown lingered, the luster wore off and Hauser joined the exodus from the Bay Area.

“Honestly, I started being a software engineer, I got into computers, because it’s convenient to be able to work remotely,” Hauser said as he was loading up a U-Haul in his San Francisco neighborhood in the fall. “Now that everyone has been working remote, and policies aren’t cemented at least until next year, there’s no reason to stay here when I could go back to family and work remotely there.”

As the months wore on, moving vans and U-Hauls became a common sight on neighborhood streets as the retreat from San Francisco and the Bay Area gained momentum.

Hauser wasn’t alone. Richard Matsui, CEO of San Francisco-based kWh Analytics, relocated to back to Hawaii.

He grew up in Honolulu. After high school, he left for the U.S. mainland and Asia for educational and career opportunities and never expected to be able to leave the Bay Area and still be able to run the company.

Then the pandemic shut down child care options in San Francisco for his baby born in January. He and his wife planned to come to Honolulu for a month so that his mother could help with the baby. A month turned into two and then six.

“If there’s an opportunity now to take mainland salaries and our mainland jobs and to execute them well from Hawaii, I do think that Hawaii has a once-in-a-lifetime opportunity to diversify the economy and … take advantage of the fact that our core strength in Hawaii is a tremendously wonderful place to live and to raise kids,” he said.

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Tesla CEO Elon Musk also departed the Silicon Valley, moving to Texas, but he did keep his headquarters in the Bay Area. That wasn’t the case for tech giant Oracle and Hewlett Packard Enterprise, who both announced moves out of state.

Musk recently compared California’s situation to sports teams.

“They (successful sports teams) do tend to get a little complacent, a little entitled, and then they don’t win the championship anymore,” Musk said of California. “(California) has been winning for a long time. And I think they’re taking them for granted a little bit.”

The numbers bore out the trend. An industry survey found that more people were leaving California than moving into state, continuing a trend that coupled with fewer births slowed the growth rate in the nation’s most populous state to a record low amid the pandemic that is reshaping its future.

Officially, California added 21,200 people from July 1, 2019, to July 1, 2020, increasing the state’s population a paltry 0.05% to 39.78 million people — still by far the most of any state.

But the bigger news from the new population estimate was that 135,600 more people left the state than moved here. It’s only the 12th time since 1900 the state has had a net migration loss, and the third largest ever recorded.

The exodus also drove down rents. Analysts at AdvisorSmith found that 10 of the top 25 cities in the U.S. where rents are fell the most, were in the Bay Area.

San Francisco was number 4 in the nation, after Odessa, TX (1); Midland, TX (2); and Williston, North Dakota (3). Other Bay Area communities include Mountain View (5), Sunnyvale (6), Redwood City (8), San Mateo (11), Oakland (15) and San Jose (19).

The range of the drop has varied wildly based on location. In San Francisco, rents have fallen from $2,650 per month to $2,081 since 2019. That’s a 26% drop. In Walnut Creek (76), the rent drop was much less: only a 3.7% drop from $2,574 per month to $2,512.

When it came to those who stayed in the Bay Area, a desire for home ownership — fueled by low interest rates and the need for more space while working remotely — buoyed the real estate market.

According to a California Association of Realtors report, the median price for an existing, single-family home in the Bay Area was $1,060,000 in September, which was down 0.7% from August’s all-time high but up 20.5% from September of last year.

“Buyer demand remains robust,” said Jordan Levine, the association’s deputy chief economist. “We see that in the mortgage applications, we see that in the price numbers for the Bay Area, in the unsold inventory numbers which declined. That is driving this rebound in sales, but it is also making the market more competitive.”

Others planned to stay in California, but relocate outside the Bay Area where home prices were more reasonable. Home sales soared in the Lake Tahoe area.

“We’ve seen a large number of transplants from other areas,” said Rhonda Keen, president of the South Tahoe Association of Relators. “It’s not just tech-workers either. We’re getting all kinds demographics buying homes without even seeing the property.”



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Hardware

Health Department Orders Ridge Hardware To Close Over COVID-19 Regulation Disputes | thebaynet.com | TheBayNet.com



RIDGE, Md. — When Donnie Tennyson poured his morning cup of coffee Saturday, he wasn’t expecting a text from his store’s manager saying that a pair of St. Mary’s County police officers wanted to see him. As he frantically grabs his coat and makes the 10-minute drive down Route 235 to his business, Ridge Hardware, he was shocked to find out he was about to be issued an order to close his business by the St. Mary’s County Health Department(SMCHD).


“While I was on the way, [my manager] sent me a text saying they are here to close us,” Tennyson said. “I walked into the store and ask the two deputies to come outside so I could distance from them without a mask… Then they handed me the order.”


The owner described a seemingly extensive history with SMCHD since the pandemic began back in March. After several complaints from customers had been made to SMCHD, the government entity made seven visits to the hardware store just over the summer months, to ensure all regulations from Maryland Gov. Larry Hogan’s[R] executive orders were being followed.


Most complaints were in regards to employees who were not wearing face masks, but Tennyson said he was informed by some employees that they have medical conditions that prevent them from wearing masks for prolonged periods. This issue was supposedly addressed by the health department back in August when Tennyson was told that installing a large piece of plexiglass at the register and keeping those employees behind it would mitigate this problem. 


After a few months passed with little word from SMCHD, Tennyson believed that he had sufficiently resolved every issue that had previously been brought to his attention. Until December began.


“[Dec. 1, SMCHD] came in… they said ‘hey, we’ve had some complaints, we’re here to do an inspection.’ On Wednesday morning, the sheriff’s deputy comes in and serves me an Order to Comply,” Tennyson explained. “[That order stated] you have three days to remedy the situation that we have pointed out is wrong and we’ll come back for re-inspection.”


Tennyson would then point out two more instances over the next three days where he would have interactions with health department personnel, all seemingly over issues he thought were previously resolved. This included meeting the four criteria that Gov. Hogan’s executive orders require from retail establishments such as posting signage about customers wearing masks, providing sanitizing equipment, and marking social distancing spaces.


One instance he described involved an SMCHD employee who allegedly refused to talk to Tennyson before speeding away from the store premises.


On Dec. 12, Tennyson would officially be served an “Order to Close” his store by St. Mary’s County Health Officer Dr. Meena Brewster, saying “Ridge Hardware is operating in a manner that poses an unreasonable risk of exacerbating the spread of COVID-19, and is hereby deemed an unsafe facility.”


“I guess I would be considered a criminal,” Tennyson joked. “I’m a law-abiding citizen trying to employ, you know, five people and support their families.”


Failure to comply with the order could result in up to one year in jail, and up to a $5,000 fine. The order stays in effect until the state of emergency has been terminated or until notified by the county health officer that the unsafe facility is allowed to continue operations under modified conditions.


While he says that he feels like he is being “targeted” and that he feels like small businesses are being more heavily hammered by government regulation, Tennyson said he is willing to fight for what he thinks is right.


“My employees know this. My customers know this, that I am pushing back and standing up for my rights,” Tennyson said. “I’ve told people I will reopen the doors if they ever closed them. I would take the chance of going to jail.”


A rally has been planned in front of Ridge Hardware today at 11 a.m., in support of Tennyson and his business. 


 




EDITOR’S NOTE: This article will be updated once we receive a response from the St. Mary’s County Health Department.





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