Tag Archives: covid-19

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Warning: GS Labs Covid Testing Is Back

They’re back.

With Covid-19 on the rise in Oregon, GS Labs apparently sees an opportunity to rip people off again. 

In January, a GS Labs Covid-19 testing site popped up at a former restaurant at 10935 SW 68th Parkway in Portland. Now it’s back. And, as before, it’s charging exorbitant rates.

Its practices are particularly egregious since the federal government will send people Covid tests for free.

The government announced its most recent free test program on May 17, 2022.  U.S. households are now able to order an additional eight free at-home tests at COVIDTests.gov—bringing the total number of free tests available to each household since the start of the program to 16. 

People who have difficulty accessing the internet or need additional support placing an order can call 1-800-232-0233 (TTY 1-888-720-7489) to get help in English, Spanish, and more than 150 other languages—8am to midnight ET, 7 days a week. 

When I stopped by GS Lab’s testing site on Friday, May 20, a worker told me I needed to schedule an appointment online. The basic test cost (“The cheapest option”, he said) would be $179 for a rapid antigen test.  A standard PCR test, which would take a couple days to get results, would be $229; a rapid PCR test would be $299. All would need to be paid for in advance online. GS Labs does not accept Medicare, he said.

The GS Labs website for an appointments at the 68th Parkway location notes,:“Apple Health(WA), Medicare/Medicare Supplement Plans, Medicaid, Tricare, GEHA, VA Plans, Bridge Plans, Oregon Health Plan (OHP) are not accepted. We also do not accept and will not file any claims to an auto, dental, life or vision policy.”

The general GS Labs appointments website allows visitors to pick a location in 10 states across the country (sadly, that’s up from eight in January), view available appointments and select a payment option. Unfortunately, GS Labs has set up five testing sites in Washington, including one in Vancouver.

Formed in January 2020, GS Labs spun out of a clinic, 88 Med, owned by City+Ventures, a privately held Omaha, Nebraska-based investment and development company. 88 Med specialized in cosmetic procedures and hormone treatments. 

City+Ventures was founded in 2012 to pursue strategic business and real estate opportunities both locally and regionally. Two men, Danny White and Chris Erickson, co-founded the company and are now co-owners. White has a B.S. in Business Administration from Skidmore College in New York. Erickson has a B.S. in Civil Engineering from Iowa State University.

The company’s website says, “We are a group of business savvy, community-minded individuals who invest our time and capital into developing, enhancing, and promoting growth in companies and communities.

Based on its covid testing practices, “business savvy” might apply, but clearly not “community minded”.

Some health insurers have refused to pay GS Labs’ fees, contending that the laboratory is price-gouging during a public health crisis, the New York Times reported in Sept. 2021.

A Blue Cross plan in Missouri sued GS Labs over its prices, seeking a ruling that would void $10.9 million in outstanding claims. In August 2021, the insurer claimed that the fees were “disaster profiteering” and in violation of public policy.

Suburban Seattle-based Premera Blue Cross sued GS Labs on Oct. 14, 2021, alleging that the company was exploiting the COVID-19 pandemic by overcharging for COVID-19 testing. Premera alleged that GS charged prices ranging from $380 to $979 per test, which often amounted to 10 times more than what other labs were charging.

Premera further alleges GS Labs “peppers its claims with falsehoods,” including false diagnoses to get higher payments, and it frequently fails to maintain high quality levels in its testing and reporting of results.  

According to Pharmacy Practice News, Premera’s suit alleged that GS Labs has improperly filed claims for more than $26 million worth of COVID-19 tests. Blue Cross and Blue Shield of Kansas City, which filed a lawsuit against GS Labs in July 2021, alleged that the lab provider billed $9.2 million in improper charges for COVID-19 testing.

In an Oct. 2021 interview with the Omaha World-Herald, Chris Erickson said he and his partners are proud of their testing business. He said it helped consumers navigate an unpredictable pandemic at a time of inadequate testing options. Fees billed to insurers reflect a high level of service and the cost of building an infrastructure of equipment and trained personnel in an “insanely short period of time,” Erickson said.

It’s not just insurance companies that are less then enthralled with GS Labs.

Indeed.com reviews of working for GS Labs are largely harsh. Typical are the following:

“Management seems to have their own motives (money)…Management seems disorganized, unfair, and corrupt based on their own agendas.”

“… it is clear, they work with no morals, no ethical treatment of employees and you are just a number…Greedy company,”

“It’s almost like being in middle school. If you are lazy, unmotivated and are just looking for a paycheck, then GSLabs Omaha is the place for you.”

“Patients are being lied to just so this company can make a profit.”

That just about says it all, I think

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Jumping to homeschooling because of COVID-19 is a risky bet.

 

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Will the COVID-19 crisis lead to more homeschooling in Oregon? If it does, for many children (and parents) that will be a mistake.

David Henderson, a research fellow at Stanford University’s Hoover Institution, thinks the forced shift of public school children to ineffective and impractical online schooling will lead many parents to opt for homeschooling. “What if, as I predict, home-schooling works, on average, better than the public schools before the pandemic?” Henderson asks. “Once the pandemic ends, many parents will want to continue with home-schooling.”

There’s no question that the idea of homeschooling can be seductive. After all, it can offer flexibility, more curriculum choice, religious freedom, self-paced learning, and protection from threatening ideas. And it can be appealing to parents who want to have a larger role to play in conveying important values to their children.

It’s not clear, however, that homeschooling is the right choice for a wide swath of children or that it adequately prepares young people to succeed and participate in our complex economy.

In addition, the fragmentation of our educational system may undermine the need for all members of our society to see themselves in common cause – a necessity for the survival of our democracy. Where too many people are isolated from their peers, they may be less likely to see a relationship of mutual commitment and responsibility to others.

The most recent analysis from the U.S. Department of Education/National Center for Education Statistics reported the number of homeschooled students increased from 850,000 in 1999 to 1,690,000 in 2016. The percentage of students who were homeschooled increased from 1.7 percent to 3.3 percent over the same time period.

According to the Oregon Department of Education, almost every school district in Oregon has seen an increase in homeschooling in recent years, with more than 22,000 students registered as homeschoolers in 2018. There’s general agreement, however, that the number of actual homeschoolers is higher because not all homeschooling parents register their child with the state.

Parents of students between the ages of 6-18 are supposed to notify their local Education Service District (ESD) of their intent to home school within 10 days of beginning to home school, but compliance is not comprehensive.

A homeschooler is expected to take standardized testing by August 15 of the summer following the completion of 3rd, 5th, 8th, and 10th grades, as long as the child has been homeschooled since at least February 15 of the year preceding testing (18 months before the test deadline).

The required tests include grade-level math (concepts, application, skills), reading (comprehension), and language (writing, spelling/grammar, punctuation, etc.)

Given the above information, you might be tempted to say that public oversight of homeschoolers is obviously comparable to that of public schools because the state knows how all homeschooled students are performing. You’d be wrong.

First, homeschooled students are not required to take common standardized tests that measure academic progress. They can opt out, and many of them do.

Second, homeschoolers’ tests are scored on a percentile, so the score a child gets represents how many people taking the same test got a lower score. In other words, the scores don’t represent how well the child knows the material, only how well the child performs relative to every other homeschooler taking the test. Even then, If a child scores at the 15th percentile or above, then the ESD simply files the report and there’s no follow-up.

Third, homeschoolers don’t have to report their scores to anybody unless their education service district (ESD) asks for them. But the state cares so little about how these children are doing that ESDs almost never request test scores, according to the Oregon Department of Education.

Not that it would make much difference if ESDs did request the scores.

That’s because homeschoolers would only need to report their composite percentile score. This is an almost useless single percentile representing a child’s performance on all three subjects together. It’s almost as though the state doesn’t really want to know how homeschoolers are doing.

What is clear, then, is that nobody in the Oregon Department of Education really knows whether parents who are homeschooling their children are providing them with an equal or superior alternative to district schools.

I get it that homeschooling can reflect a lack of confidence in traditional educational institutions. However, despite the almost messianic belief in homeschooling held by many supporters, there are major flaws in this alternative. If one result of the pandemic is widespread abandonment of Oregon’s brick-and-mortar public schools for homeschooling, the damage inflicted on some children could be severe.

All Oregonians, particularly the legislature and governor, should care because education is not just a private good. Studied indifference or washing our hands of the consequences of educational malpractice can have serious consequences for the community at large.

As Chester Finn Jr., Distinguished Senior Fellow and President Emeritus at the Thomas B. Fordham Institute, said, “Once you conclude that education is also a public good—one whose results bear powerfully on our prosperity, our safety, our culture, our governance, and our civic life—you have to recognize that voters and taxpayers have a compelling interest in whether kids are learning what they should…”

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40% of American workers couldn’t come up with $400. Is that true?

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There it was again.

Only six in ten American workers could afford a surprise $400 expense, John Hope Bryant, founder of Operation Hope, an Atlanta-based non-profit, told the Wall Street Journal for a profile that ran today (July 25, 2020)

That $400 figure crops up everywhere like a persistent weed, portraying a large segment of Americans as living perilously on the edge of catastrophe.

“Some 40% of Americans would struggle to come up with $400 for an unexpected expense,” reported CNBC.

“In America right now today, almost half of Americans are a $400 unexpected expense away from complete upheaval,” Sen. Kamala Harris (D-CA) said on April 1, 2020 when announcing plans to introduce a Rent Relief Act.

“The gap between incomes and costs is so gaping that 40% of Americans can’t come up with $400 in an emergency,” Sen. Elizabeth Warren said on May 9, 2019.

Those pushing the $400 story usually cite the Federal Reserve’s report, “Well-Being of U.S. Households in 2018.”   The Report writers interviewed a sample of over 11,000 individuals—with an online survey in October and November 2018.

But the 40% figure is wrong.

People who just skimmed the initial text of the executive summary of the Report or relied on a text message, probably saw this: “Results from the survey show that many adults are financially vulnerable and would have difficulty handling an emergency expense as small as $400.”

If they read the Report itself further, however, they would have seen this: “If faced with an unexpected expense of $400, 61 percent of adults say they would cover it with cash, savings, or a credit card paid off at the next statement—a modest improvement from the prior year. Similar to the prior year, 27 percent would borrow or sell something to pay for the expense, and 12 percent would not be able to cover the expense at all.

So it’s not true, as Warren claimed, that 39% of people “can’t come up with” the money they’d need to handle this situation.

The Federal Reserve report makes clear that, although 4 in 10 adults “would have more difficulty covering such an expense,” many of them would be able to make it work by carrying a credit card balance or borrowing from friends and family.

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Parents are often the source of financial help. One in 10 adults received some form of financial support during 2018 from someone living outside of their home. Over one-quarter of young adults received such support and among young adults with incomes under $40,000, nearly 4 in 10 received some support from outside their home.

Only 12% of adults “would be unable to pay the expense by any means,” the Federal Reserve Report concluded.

This doesn’t mean, however, that all is well in the American economy. Although many families reported that they had made substantial gains since the survey started in 2013, persistent disparities remained by race, education, and geography. Also, the report relied on interviews in 2018, well before COVID-19 struck the United States and massive economic dislocation occurred.

All the research done so far is showing that the economic fallout from COVID-19 is hitting lower-income adults harder.

The Pew Research Center has noted that The financial shocks of the outbreak have hit Hispanic and black Americans especially hard. When it comes to public health, black Americans appear to account for a larger share of COVID-19 hospitalizations nationally than their share of the population. One result is that, according to a July 2020 Rand Corp. survey, 40% of non-Hispanic black households and nearly 50% of Hispanic households reported problems paying their bills, compared with 21% of non-Hispanic white households.

We won’t know for quite a while what the public has to say to the Federal Reserve about how things are 2020, but it probably won’t be good.

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Why do Republicans want to undermine Oregon’s public schools?

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What were they thinking?

Oregon’s traditional brick-and-mortar public school system is under stress and needs support. So what did the Republicans propose coming into the special session that started on June 24?  They wanted to make it easier for students to transfer from their district’s brick-and-mortar public schools to virtual public charter schools, taking State School Fund dollars with them.

Oregon law provides that a school district may deny a parent’s request to shift their child to a virtual public charter school if more than 3% of the students who reside in the district are enrolled in virtual public charter schools not sponsored by the district.

Senate Republican leader Fred Girod (R-Stayton) proposed raising that 3% figure to 8% to allow more students to abandon their district’s schools. “Given this pandemic, people are going to want an alternative, and that alternative is going to be virtual schools,” Girod said.

Not only would this have potentially siphoned millions from already stretched district budgets, but research on virtual charter school performance outcomes across the country generally paints a distressing picture. In other words, Oregon’s traditional public schools clearly have their problems, but the virtual public charter schools are even worse.

The desire of some parents for school choice is understandable, but numerous studies have concluded that full-time virtual charter schools are not the right option for many K-12 students. The fact is many K-12 virtual charter schools are like tribute bands, just a facsimile of real education.

“Current online charter schools may be a good fit for some students, but the evidence suggests that online charters don’t serve very well the relatively atypical set of students that currently attend these schools, much less the general population,” the Center for Research on Education Outcomes (CREDO) at Stanford University said in a report. “Academic benefits from online charter schools are currently the exception rather than the rule.”

In the same vein, a report from the Colorado-based National Education Policy Center (NEPC) concluded, “There is…little high-quality systematic evidence that the rapid expansion of (virtual charter schools) the past several years is wise. Research has …consistently found that students enrolled in full-time virtual schools have performed at levels well below their face-to-face counterparts.”

A Fordham Institute study of virtual charter schools reached similar conclusions. “Online schools offer an efficient way to diversify—and even democratize—education in a connected world,” the study said. “Yet they have received negative, but well-deserved, attention concerning their poor academic performance, attrition rates, and ill capacity to educate the types of students who enroll in them.”

As most educators and parents learned in the widespread switch to online schooling spurred by COVID-19, it has been a worst-case outcome for most students. “There’s a sense that this has been an unmitigated disaster,” Dana Goldstein, a national correspondent for The New York Times, said in a June 28, 2020 Innovation Hub interview.

A recently published study published in Educational Researcher examined the effects of attending a virtual charter school on student outcomes. “We find the impact of attending a virtual charter on student achievement is uniformly and profoundly negative,” the authors wrote in a Brookings article.

The study authors concluded that “virtual charter schools are ill-equipped to take on a more prominent role” in light of the COVID-19 crisis. “Based on their dismal track record, policymakers should instead focus on greater oversight and accountability for these schools. Perhaps the worst policy response during the COVID-19 crisis is to promote these schools…”

Thankfully, Girod’s proposal didn’t go forward as a bill in the special session. It would be a shame if it rears its ugly head again.

Further reading:

Oregon’s Public Virtual Charter Schools Don’t Compute

COVID-19 and student learning in the United States: The hurt could last a lifetime

Too Many Schools Leave Learning to Chance During the Pandemic

Oregon Connections Academy: Still a Virtual Calamity

Alternative Schooling in Oregon: Is the Cure Worse than the Disease?

 

 

 

 

 

 

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When a COVID-19 vaccine is found, give it to me first.

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Karen Zimmerman

Karen Zimmerman, 74, died on April 14, 2020 at Good Samaritan Regional Medical Center in Corvallis. Two of her four children were by her side.

Bobby Rutledge, 77, died April 1, 2020; Robert Rykken, 83, died May 8, 2020; Merle and Delores Tofte, 87 & 85, died March 16, 2020.

All Oregonians, all died from COVID-19, all older adults.

They fit a pattern.

People 65 years old or older account for 80% of COVID-19-related deaths in the United States to date, according to the CDC.  It’s not just their age that’s relevant. Older people are more likely have underlying health conditions, such as cardiovascular disease, lung conditions, diabetes and cancer. These complications, not just age, dictate the mortality of older adults.

The mortality of COVID-19 patients is just 0.3% for patients in their 40s, according to research by Imperial College London published in Lancet Infectious Diseases. Mortality rose to 1.25% of those in their 50s,  4% of those in their 60s, 8.6%, of those in their 70s and 13.4% of patients 80 and older.

“These early estimates give an indication of the fatality ratio across the spectrum of COVID-19 disease and show a strong age gradient in risk of death,” the research concluded.

Not only are older adults more at risk, but as treatments have improved fewer young people are dying. In late March, Americans over age 75 made up about half of all weekly deaths while Americans under 45 made up between 4-5%, according to the CDC. People over 75 now make up about two-thirds of deaths while those younger than 45 make up less than 2%.

Covidagechart

With these kinds of numbers, it only makes sense that when a successful vaccine is developed it shouldn’t be given away willy-nilly or first come-first served. It should be given first to those most at risk, older adults. I’m 76, so that includes me and my older folks cohort. Right?

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Salem, OR salon owner turning COVID-19 shutdown protest into cash

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Lindsey Graham (Source: KPTV.com)

Lindsey Graham, operator of Glamour Salon in Salem. OR, has figured out how to make money off her defiance of Gov. Kate Brown’s COVID-19 stay-at-home order.

Graham reopened her salon on Tuesday, May 5, 2020, saying she had to make the move to pay her bills and provide for her family.

Conveniently, she started a GoFundMe account the day before, on May 4, prior to government action in response to her salon’s reopening.

“Our family businesses have been shut down by the government,” the account said. “No income for our family and next to nothing in govt assistance. Please help our family fight for our American rights and save our hard earned dreams. The govt has strong armed us, threatened us, and come after our family. We are taking a STAND and the legal battle ahead of us will be long and tough. We appreciate ALL your support in every way!!”

Graham set the GoFundMe account’s goal at $70,000. As of Friday afternoon, May 28, it had raised $71,070. Ten contributors had given $500 or more, one gave $2000. Not a bad haul. And not only can Graham spend the money pretty much however she wants, but it may not even be taxable income.

On May 14, Graham posted to the account that Oregon OSHA had fined her $14,000 and demanded she close the salon’s doors.

“This is not only unconstitutional, but unlawful and unjust,” Graham posted.
Please share this…..I will be FIGHTING this citation and fighting their case. I’m retaining my attorney to take this to court!!!! The government cannot find their own loopholes to punish me for trying to earn a living.
Please support my cause and help me fight!!!!”

In pleading for financial support from the public, Graham is copying a tactic employed by Shelley Luther, the Dallas, TX owner of Salon à la Mode who was arrested on April 24, 2020 for opening her business despite COVID-19 restrictions.

A GoFundMe site to help her went live on April 23, 2020, the day before her arrest.

“Shelley Luther is an American Hero that has decided to resist tyranny by opening her business against an unlawful State Executive Order,” read the description for the Shelly Luther Fund campaign.

A fellow Texan, Rick Hire, said the Woke Patriots organization was behind the campaign. In a 30-minute May 9  YouTube video, Hire says he founded the organization to deal with challenges to constitutional rights and the group picked Luther to be the first beneficiary of a GoFundMe campaign.

The GoFundMe site was a hit right out of the gate. When an initial goal of $250,000 was rapidly surpassed, the goal was raised to $500,000. The total raised now sits at $500,040 and the window for donations has closed.

Who knows? Lindsey Graham may hit the jackpot, too.

 

 

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After COVID-19, whither Washington Square mall? Pier 1 latest to liquidate.

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When J.C. Penney filed for bankruptcy on May 15, 2020, did it put another nail in Washington Square’s coffin or signal a major transformation of the mall?

‘The Washington Square mall was a wondrous thing when it opened. The enclosed site, designed to entice shoppers with large anchors supplemented by smaller scale stores, attracted customers from as far away as Seattle.

The original mall encompassed 1,093,500 leasable square feet and was the largest enclosed shopping center in Oregon. It has a long history of change and renewal.

A 160,000 sq. ft. Meier & Frank store was the first to open for business on August 16, 1973. A 211,900 sq. ft. Sears store came next in October of that year, followed by a 120,000 sq. ft. Lipman’s in November. In May 1974, Nordstrom made its debut with a 108,000 sq. ft. store, followed by an 89,300 sq. ft. Liberty House store in August 1974 and a 210,000 sq. ft. J.C. Penney store in August 1975.

Turnover among the larger stores began within a few years.

  • In 1978, Frederick & Nelson took over the Liberty House store.
  • In 1979, Frederick & Nelson acquired the Lipman’s chain and moved the former Lipman’s space; Mervyn’s then took over the former F&N space.
  • In 2008, Mervyn’s declared bankruptcy and closed all its stores, including the one at Washington Square.
  • In 1991, Frederick & Nelson declared bankruptcy and closed its Washington Square store.
  • In 2005, Mervyn’s closed.
  • In 2008, Dick’s Sporting Goods took over the former Mervyn’s space.

The mall weathered all of these changes and its current owner, Macerich, a real estate investment trust, has been rewarded with average sales per square foot of $1261. But much greater challenges have now emerged, particularly with the mall’s anchor stores, but with some smaller retailers as well.

The Wall Street Journal predicted last week that about 100,000 stores are expected to close over the next five years—more than triple the number that shut during the previous recession. Partly to blame is the jump in e-commerce to 25% of U.S. retail sales from 15% last year, UBS estimates.

“The turbocharged shift to e-commerce is expected to further depress profit margins and accelerate a shakeout in a country that already had too much bricks-and-mortar space for an increasingly digital world,” The Journal said.

It is also looking increasingly less likely that the economic recovery from COVID-19. In a May 17 interview on the CBS show 60 Minutes Federal Reserve Chairman Jerome Powell warned that the economic recovery could take over a year . “We’ll get through this. It may take a while,” Powell said. ” It may take a period of time. It could stretch through the end of next year.”

In the Portland Metro Area, no anchor stores at malls are really safe. On May 6, Nordstrom said it planned to permanently shut 16 of its 116 full-line stores as part of its adjustment to the retail environment during the coronavirus outbreak. The following day, it said it would not reopen its Clackamas Town Center location in Happy Valley, OR after the COVID-19 shutdown ends and that the store will be permanently closed by August, 2020. Nordstrom closed two other Oregon-area stores in 2015 and one in 2018.   Nordstrom stock over the past 12 months is down from $37.46 to $16.41, a 66% decline.

Against this backdrop, consider the situation with many of Washington Square’s stores as the mall remains closed during the COVID-19 turmoil:

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 The mall’s current troubles began with the bankruptcy of Sears in 2018 and the closure of its 211,900 sq. ft. Washington Square anchor store in 2019.

 

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On May 18, 2020, Pier 1 Imports, which was founded in 1962, said it is permanently closing all its 540 retail stores, including one at Washington Square. The stores will reopen after the COVID-19 shutdowns and then proceed to liquidate their merchandise.

The company filed for chapter 11 protection earlier this year on Feb. 17 in the U.S. Bankruptcy Court in Richmond, Va. and had hopes of a sale to an interested buyer, but none emerged. “It is now clear that Pier 1’s future does not involve any brick-and-mortar retail locations,” the company said.

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Chinos Holdings, J. Crew’s parent company, which also owns Madewell, filed for Chapter 11 bankruptcy protection  in federal bankruptcy court for the Eastern District of Virginia on May 3, 2020.  J. Crew has lost money for six straight years. Like many of its peers, it took it on the chin with the increase in e-commerce. But J. Crew also struggled to deal with $1.7 billion in debt resulting from a leveraged buyout by two private equity firms ( TPG Capital and Leonard Green & Partners) in 2011.

“Like many other retailers, J. Crew and Neiman (Marcus) over the past decade paid hundreds of millions of dollars in interest and fees to their new owners, when they needed to spend money to adapt to a shifting retail environment,” the New York Times reported on May 14, 2020. “And when the pandemic wiped out much of their sales, neither had anywhere to go for relief except court.”

 

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After a long decline,  J.C. Penney filed for bankruptcy on May 15, 2020. The company, which hasn’t booked an annual profit in nine years. said it plans to close an undisclosed number of its roughly 850 department stores and put itself up for sale. The company’s annual net sales contracted 8.1% to $10.7 billion in 2019, following a 7.1% decline in 2018, 0.1% in 2017 and 0.4% in 2016. J.C. Penney’s stock hit a high off $82.23 on March 29, 2007. It started 2020 at $1.12 a share and has been trading below $1 per share for most of this year. It closed on May 15, 2020 at 24 cents a share.

“I don’t think there is a place for J.C. Penney anymore,” Robin Lewis, founder and CEO of The Robin Report, which reports on the retail industries. said to CNBC on May 16, 2020. “Even if we didn’t have this virus … we have been over-stored for half a century in this country.”

In the same vein, an April 2020 report from Green Street Advisors, a real estate research firm, said more than 50% of the department stores anchoring America’s malls are going to close permanently by the end of 2021. “Many malls will now be faced with multiple anchor vacancies, a tough place to come back from, especially in an environment where demand for space is virtually non-existent,” said said Vince Tibone, a Green Street analyst.

The April report was prescient when it said JCPenney in particular was on the edge of a bankruptcy that would probably result in its liquidation.

On May 18, the company said it expects to close about 242 stores — 30 percent of its locations — as part of a restructuring plan.

 

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“With little or no revenues coming in for these non-essential retailers – traditional department stores, fashion, and luxury retailers being the most profoundly affected – many of the most prominent mall-based retailers, which have been struggling for years from falling sales and weighted down by too much debt, are teetering on the brink,” the Robin Report said in April 2020. Macy’s Inc. lost its investment-grade rating from Standard & Poor’s and saw its debt rated junk in February 2020.

The company is now seeking loans to bolster its cash flow, which has significantly decreased as a result of the shutdown, according to a May 7, 2020 regulatory filing. It is also looking to sublease almost half of its Long Island City headquarters in order to retain more of its cash.

Over the past 52 weeks, Macy’s stock has dropped from a high of $23.40 to $5.31 on Friday, May 15, 2020.

 

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Gap Inc. is the parent company of Gap, Athleta, Banana Republic, Old Navy, Janie and Jack, and Intermix.

Sonia Syngal, CEO of Gap Inc. said in mid-March that the company would likely reopen fewer stores for the flagship Gap brand after the COVID-19 closures are lifted. “We’ll be using this as an opportunity to refashion the company for what we want it to look like over the next 50 years,” Ms. Syngal told the Wall Street Journal in early May 2020.

Market watchers are more cautious, having watched Gap’s stock decline from $17.28 at the beginning of the year to $7.60 on Friday, May 15, 2020, a 56% drop.

“The apparel industry is rattled, and Gap is no exception,” Forbes reported on May 7, 2020. ” A COVID recession will impact the company’s revenues, cash flows, and ability to pay dividends. We estimate that a recession that persists through late Q3/early Q4 2020 can reduce the company’s revenues by 40% from $16.4 billion in 2019 to $10 billion in 2020.”

On April 23, 2020, Gap Inc. warned in a filing with the U.S. Securities and Exchange Commission it may not survive the next 12 months intact. The company said it had suspended rent payments for shuttered stores, which approximated $115 million per month in North America, and was in talks with landlords to defer payments, change lease agreements, or in some cases, terminate the leases and permanently close some stores.

“We will need to take additional actions to both preserve existing liquidity and seek additional sources of liquidity, beyond our currently available cash and credit facilities within the next 12 months as existing cash and cash expected to be generated from operations may not be sufficient to fund our operations,” the SEC filing said.

 

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Abercrombie & Fitch derives the bulk of its revenues from the US, which has been hit hard by COVID-19. The outbreak of the virus has led to a steep fall in demand, which the company’s Q1 2020 results on June 4, 2020 will likely confirm with major drops in revenues across all segments.

“Already struggling with sluggish sales and low gross margin, the company will face significant challenges from store closures,” The Motley Fool, a financial and investing advice company, said in mid-March.

Abercrombie & Fitch, showing it is not immune to the impacts COVID-19 is having on other retailers, has said it’s open to leaving any shopping center while it reassesses its store base. “We’re willing to walk away from any mall at this point. It’s about getting the right store in the right location at the right size,” CFO Scott Lipesky said in March.

Its stock is down from $17.48 at the start of the year to $11.14 at the close on Friday, May 15, 2020.

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L Brands, parent of  Victoria’s Secret, Pink and Bath & Body Works, might not survive the pandemic after Sycamore Partners, which agreed to buy a 55% stake in Victoria’s Secret in February, tried to cancel the $525 million deal and agreed earlier this month to scrap it. Shares of L Brands have fallen 53% in the past 12 months.

On May 14, 2020, Leslie Wexner, a retailing legend, officially retired after 56 years as head of the company. The New York Post reported that his departure came at a time when his reputation “…has been tainted by sagging sales at Victoria’s Secret; complaints of a culture of misogyny, bullying and sexual harassment at the lingerie peddler; and new revelations about Wexner’s business dealings with convicted pedophile Jeffrey Epstein.”

On May 20, L Brands,, posted a first-quarter net loss of nearly $300 million and reported that net sales fell 37 percent in the quarter to $1.65 billion. Sales at Victoria’s Secret fell by almost 50% half and Bath & Body Works declined 18%.

Victoria’s Secret, which has long positioned itself as a purveyor of elegant and sexy lingerie styles,  has been struggling with changing tastes, declining revenues and a stale image.

 

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Lolli & Pops candy company filed for bankruptcy in August 2019.  Online sales ceased in February 2019 and the company ceased paying rent to some landlords in April 2019. The company blamed vanishing visitors at shopping malls for its financial troubles. In March 2020, the company was purchased for $2.4 million by an affiliate of TerraMar Capital LLC, which said it planned to diversify the company into e-commerce and wholesale. It is unclear whether TerraMar is succeeding in reviving the company.

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1-800-flowers.com, the parent company of Harry & David, which has operated seasonal stores at Washington Square, said in April 2020 it would permanently close most of the brand’s bricks-and-mortar locations in the U.S. and focus on an e-commerce future.

Harry & David filed for bankruptcy protection in 2011, crippled by debt piled upon it by private equity owners. The company emerged from six months in Chapter 11 bankruptcy protection in September 2011 after the court approved its reorganization plan. 1-800-flowers.com acquired Harry & David Holdings for $142.5 million in cash. The sale closed in September 2014.

 

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Standard & Poor’s ratings say Ascena Retail Group (ASNA), the parent of Ann Taylor, could default in coming months or years. It is expected to face significant challenges as remote work becomes more prevalent in the coronavirus era and the way women dress, particularly professionals, is changing dramatically.

Ascena operates stores under the Premium Fashion segment (Ann Taylor, LOFT, and Lou & Grey), Plus Fashion segment (Lane Bryant, Catherines and Cacique) and for tween girls under the Kids Fashion segment (Justice).

“Ascena…has had five consecutive years of losses as it has struggled to offer the right clothing selection, relied heavily on discounting and maintained stores in less-than-ideal locations,” Bloomberg reported in Oct. 2019.

Ascena recently repurchased some of its debt at below-par prices, which S&P Ratings deemed a “selective default.” Even after the company relieved some of its debt burden with that step, S&P assigned Ascena a credit rating of CCC-, the lowest before default. That was based on the analysts’ expectation of “conventional default or a broad-based restructuring of Ascena’s capital structure in the next six months.” Ascena’s stock is down 83% year to date. 

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Houston-based Tailored Brands Inc., the parent company of Jos. A. Bank (and Men’s Wearhouse), has been showing sales decreases and rapidly shrinking profits. In Its fourth quarter earnings, Tailored Brands saw net sales drop 3% to $691 million while Jos. A. Bank sales dropped 5% to $204.7 million.

For the full fiscal year 2019, on a GAAP basis Tailored Brands reported a loss of $35.0 million compared to operating income of $13.3 million in Fiscal Year 2018.  Mary Beth Blake also resigned as president of Jos. A. Bank in December as part of a reorganization.

Men’s Wearhouse’s acquired  JoS. A. Bank in March 2014 for $1.8 billion. With both retailers now suffering sales declines, Tailored Brands would probably prefer to have that $1.8 billion now.

“(Tailored Brands)…is trying to change course a bit by offering things like jeans and more business-casual attire,” The Motley Fool wrote in Dec. 2019. “But this segment is pretty well saturated by a plethora of brands, so it’ll be tough. Tailored Brands is far from a top stock and faces multiple challenges that all need to be addressed now. Based on its balance sheet, the time to fix those problems is getting shorter and shorter.”

The company’s stock is down more than 70% so far this year.

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Washington Square closed on March 18, 2020 because of the Covid-19 crisis. A reopening date is still not settled. When it does reopen, with so many of its retail tenants at risk, the continuation of the mall as we know it is doubtful. Will Washington Square be able to evolve to suit changing economics and tastes?

Will it be more like this:

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Or this:

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by - 2 Comments

Guest Opinion: Gov. Brown’s Covid-19 Emergency Declaration is Unconstitutional

NOTE: On May 18, 2020 a Baker County, OR judge invalidated the governor’s restrictions on businesses and social gatherings, along with every other executive order Brown has issued under a state of emergency she ordered due to the COVID-19 pandemic. https://bit.ly/3dYTwM6

By Glen Wagner   GWagnersmall

 

One thing I have not seen addressed enough in regards to Oregon Governor Brown’s actions related to the COVID-19 situation is the literal unconstitutionality and illegal nature of her Emergency Declaration or her blatant continued violation of the constraints placed on her from the Oregon Constitution.

Willamette University professor Paul Diller has bloggedabout the matter, arguing that Brown’s emergency orders should have an expiration date, and Willamette Week has written about his argument, but that’s it.

In my view,  a basic reading of Section 6.1 of Article X-A of the Oregon Constitution (found at https://www.oregonlegislature.gov/bills_laws/Pages/OrConst.aspx) clearly states that emergency powers shall not extend beyond 30 days from the time of proclamation, after which the articles will expire.

Section 6.2 of Article X-A says that a 3/5 approval of the Legislative Assembly is required to extend the date beyond 30 days. Section 6.5 of Article X-A says that the Governor cannot issue a second proclamation for the same emergency.

Gov. Brown declared the COVID-19 emergency on March 8th. Per the Oregon Constitution, the emergency legally ended on April 8th. As far as I know, the Legislative Assembly did not vote to approve a time extension. Therefore, any of the Governor’s current actions justified by this emergency declaration are fundamentally unconstitutional.

Gov. Brown’s Emergency Declaration states it is to last 60-days. The declaration itself is in violation of Section 6.1 of Article X-A in the state constitution.

The governor’s Emergency Declaration further claims the 60-day term “can be extended or terminated by the Governor”. Per ORS 401.204 the Governor (or the Legislature) can terminate the emergency, but it does NOT give the Governor the authority to extend it. Article X-A Section 6.2 makes it clear ONLY the Legislative Assembly can do this.

According to ORS 401.165.1 the declaration needs to specify an area “no larger than necessary to respond to the emergency.” 433.441.2(b) Says it should state the political subdivision or geographical area subject to the proclamation. Governor Brown’s Emergency Declaration states the emergency to be “state-wide”.

While public health information is listed within the declaration, it is not a foregone conclusion that all counties in the state had equal risk of infection and not all asked for an emergency to be declared. The purpose of the limited geographical nature of an emergency is to ensure focus of state resources and limit emergency powers to a specific area. In can be argued that by making it immediately state-wide the states and county resources were de-focused and spread thin rather than concentrated at the points of highest risk such as in urban areas. While not in violation of the law, it is surprising no one in the legislature raised any challenge to this scope determination.

ORS 433.441.2(d) Says the proclamation must contain a duration IF LESS THAN 14 days; in other words, there is a statutory limit on the Public Health Proclamation of 14 days. Governor Brown’s Emergency Declaration clearly violates this requirement by stating a 60 days duration.

ORS 433.441.5 Says the proclamation expires when the Governor declares it or NO MORE THAN 14 days after the proclamation. The Governor can extend the duration by another 14-day period (1) for a total of 28 days. This is in compliance with the Constitution’s Article X-A since it is within 30 days. It does NOT give the right to the Governor to extend the duration indefinitely. Therefore, Governor Brown’s Emergency Declaration of 60-days and that the Governor can extend the time frame is in violation of this statute.

ORS 433.452 Says that it is reasonable for the state to detain an individual who has been exposed to the reportable condition only for the time necessary to collect contact tracing information. The individual is to be educated on the nature of their exposure. Nowhere can I find in this statute where the Governor is given the authority to detain ANY or ALL individuals who have not been shown to have been exposed to the reportable condition. Her order indicated only 14 people in a state with a population of over 4 million had contracted COVID-19 and only in a small geographical location. There was no justification for and no legal right for the Governor to issue a stay at home order for healthy individuals. Likewise, even if this order had been legal it should have expired on April 8th like everything else.

Therefore, the Governor has exceeded her authority to detain unaffected individuals and for durations far exceeding anything allowed in the state constitution or statutes.

The Governor just issued an extension to her originally unconstitutional declaration, which is an actual illegal act to the aforementioned references. In addition, she cites two statutory references: ORS 401.165 and ORS 401.204 as justifications of her right to extend the emergency for another 60 days.

401.165 only states the Governor’s ability to issue a declaration, which she already did on March 8th. 401.204 pertains to ENDING the emergency, not extending it. And then to sound all legal she says it is all under ORS 401.025. All this section does is define some terms for the rest of the statute. Basically, they included these references to give an air of legitimacy when in fact they have no bearing on the extension proclamation at all. This shows culpability and intent to continue to violate our laws.

Where is the push-back?

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Kate Brown needs to bite the bullet on a Covid-19 budget

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Gov. Kate Brown wants all state agencies to submit plans for 8.5 percent cuts in their general fund dollars for the two-year budget cycle because of the expected impacts of the Covid-19 pandemic.

What a complete waste of time.

A smarter, bolder governor would abjure equal across-the-board cuts in favor of cuts targeted at lower priority, low-quality or ineffective programs.

The order for across-the-board budget cut scenarios is a lazy cop-out that substitutes simple, seemingly fair cuts for hard decisions that might raise political hackles.

If all programs are kept in place and just reduced in size and scope, opportunities to eliminate waste are lost and saved but ineffective programs tend to grow again when higher state revenues return.

As George W. Bush said, “There comes a time when every program must be judged either a success or a failure. Where we find success, we should reward it, repeat it, make it the standard. And where we find failure, we must call it by its name. Government action that fails in its purpose must be reformed or ended.”

Indiscriminate equal across-the-board cuts also ignore differential effectiveness between state government programs and differences in policy priorities. They are agnostic as to what the state should really be doing with its revenue and lock in current policy priorities.  They also penalize the leanest and most efficient agencies that have less fat to cut.

Some programs may also be able to sustain their core functions with a specific percentage cut, while others can’t.  You can’t, for example, cut the length of a bridge by 8.5 percent.

Uniform 8.5 percent cuts will mean that valuable, impactful projects and investments will be cut as much as in equal measure with bloated, duplicative projects and state employees doing great work will be cut along with those doing shoddy work.

In addition, although government frequently tries to cloak all spending in the “investment” bucket, it is true that some spending is intended to be more an investment in the future than a short-term outlay.  An across-the-board spending cut that applies to even productive public investments may reduce current spending, but make future budget problems worse.

“At this point, the reduction plans are a planning exercise that will give the Governor a series of options to consider,” Liz Merah, a spokeswoman for Gov. Brown, said to OPB.

Exercise is right, as in performance without a purpose.