Zooming In

Sunday, March 09, 2025

I’ve begun to explore zombie companies—businesses that generate just enough revenue to keep operating and can service their debt but lack enough profitability to invest in growth or fully pay off their obligations. I’m learning that these companies may survive because of favorable economic conditions, like low interest rates.

I see some publicly traded companies labeled as potential zombies because they have persistent financial struggles (many of which trace back to economic disruptions in the COVID-19 era). Some “zombies” are Peloton, Beyond Meat, Carvana, and AMC Entertainment. Their futures are uncertain, however, as restructuring efforts or shifts in market conditions could turn things around.

I work part-time in a retail department store and see firsthand the mounting pressures on the retail sector, from shifting consumer behavior to evolving business needs. Many zombie retail companies might be teetering even more on the edge in today’s volatile political and economic climate.

I often think of this as a chainsaw environment—a ruthless, high-stakes reality shaped by national leadership. It threatens the broader retail industry and deepens consumers’ personal financial anxieties.

This chainsaw environment—defined by high interest rates, tightened credit conditions, and changing consumer habits—poses a grave risk to zombie companies, particularly in retail. While some large retailers survive in times of cheap debt, rising borrowing costs erode their ability to remain afloat.

Tight economic conditions affect everything. They may force a zombie business into bankruptcy, like Bed Bath & Beyond, or force one simply to disappear. Economics certainly influences our personal comfort as consumers.

My retail experience teaches about a brutal industry. A retail company’s survival depends on its adaptability, capital availability, and market confidence. Unless economic conditions shift favorably—or they secure an external bailout—today’s struggling retail businesses may run out of time.

Dear Friends: Witnessing chaos reduces spending, and we worry about our jobs. Diana

Magical Gifting

Thursday, April 25, 2024

Working in retail teaches that charge accounts are a key way the retail industry makes money. Retailers that issue their own cards establish a special relationship with cardholders. A store’s unique card increases sales, ensures customer loyalty and repeat business, earns interest income, and provides data and customer insights. Stores also may partner with banks to provide credit card services and share monetary rewards.

For customers, it’s convenience. Almost magically, they shop without needing cash or a debit card. Many stores also offer rewards programs tied to their charge cards. Customers receive points or cash back for purchases. Incentivizing customers to return and use a store’s card ensures repeat business.

Charge accounts also provide a retailer with valuable data on customers’ spending habits and preferences. This helps the store create targeted marketing campaigns and personalized promotions and develop new products better suited to its customer base.

My part-time job in retail has made me a witness to all those elements. I’m impressed by how efficiently the retailer I work for captures everything associated to its credit business. My job also makes me aware of a very negative side to the business of easy credit and rewards for customers with charge accounts.

Customers with credit cards often say they purchase too much. Many such shoppers soon learn that store cards’ interest rates are high and that late fees accumulate quickly. These days, shoppers often explain that they have opened credit cards previously and ultimately found they couldn’t pay off monthly card balances. After accumulating great debt by using a card and finally managing to struggle from under the burden, these shoppers are adamantly opposed to opening another charge card.

Dear Friends: All this argues for a greater focus on managing our assets skillfully. Diana

Retail Rant

Wednesday, April 24, 2024

I was called to work on my day off yesterday, which was no surprise. The department store is shorthanded in workers and asks all its regulars to help above and beyond.

These days, the retail industry is in crisis. There are many confusing price cuts, much pushing for credit applications, incredibly complicated online competitions, and growing numbers of empty brick-and-mortar stores.

While I am working in the department store, its customers keep me aware of the confusion in navigating current retail processes. For example, they have learned to compare online and in-store prices and may enter an actual store to negotiate for the best price. Upon finding an item online that they want but that a physical store doesn’t stock, disappointed customers are essentially forced to shop online.

Price cutting is rampant, and nobody knows where that might go. Retailers must make profits, so price-cutting is an art; sale pricing is a game–a tease designed to draw would-be customers. All retailers are doing whatever’s needed to make buying quicker and easier, to attract customers.

Customers know all this, are highly aware and still purchasing like crazy. Retailers keep pushing sales and offering rewards as incentives. Meanwhile, buyers are struggling with debt from easy buying.

You get it because most of us overbuy readily available products. Nonetheless, retail must keep changing and solve the current burdens of disappearing storefronts, its hugest retailers competing mightily to keep and gain customers, and a central issue of pricing dancing with the unrest of inflation and interest rates.

Dear Friends: This commercial climate stresses a hard lesson of restraint. Diana

Past “Magic”

Tuesday, February 27, 2024

Long ago, in my career as a learning and development specialist, I designed employee training. My goal was to help various levels of employees understand better and embrace an organization’s goals, and work to achieve them.

Yesterday, I learned that the department store where I work as a part-time clerk must address some challenging goals. Meeting those goals calls for boosting the energy of front-line staff. When our store manager told me about this, my mind activated my training brain.

Last night, I drafted a couple of proposals to address some training-related challenges. For me, that was duck soup: I could create training and development routines in my sleep.

There’s a problem in modern organizations. They don’t offer in-person training and development activities. Companies today provide online goals and skills training. Although perhaps well-presented, hours on the receiving end of computer-generated training can turn learners into brain-dead, unabsorbing beings.

Today, I will take my training proposals to work. Hopefully, the Store’s management team will discuss the suggestions, and all or some will resonate. Improving ways of training staff would help line personnel more fully understand and focus on key goals, to achieve more of them.

Dear Friends: Regardless of the outcome, finding my mojo again is fun. Diana