How long can REI survive before they go bankrupt?

I think we can all agree that we want REI to do well.

REI is a big box-scale retailer with a high end, specialized product.  I assume that commerical properties are not being protected from evictions by any state (I don't see how they could since states generally cannot modify contracts, although the Fed can and does all the time).  

I wonder how long they can pay on their leases on high-price commerical real estate before they break them?

Is REI utilizing anything in the stimulus package to protect itself? I'm curious to hear from an actual REI rep if possible.

Waiting for the liquidation sale to use my dividend. 

Zach Anatta wrote: I think we can all agree that we want REI to do well.

REI is a big box-scale retailer with a high end, specialized product.  I assume that commerical properties are not being protected from evictions by any state (I don't see how they could since states generally cannot modify contracts, although the Fed can and does all the time).  

I wonder how long they can pay on their leases on high-price commerical real estate before they break them?

Is REI utilizing anything in the stimulus package to protect itself? I'm curious to hear from an actual REI rep if possible.

Zach,

If you want to hear from REI, write them, not MP. All you will get here is uninformed speculation.

Although MP is owned by REI, I doubt you will get an official REI response here (this is uninformed speculation!).

REI is richer than Croesus. They'll be fine. 

Extend this question to any business that is closed.

REI
1) They are still OPEN with online sales

2) How much reduced overhead with B/M stores closed

3) They have money

4) Has power to negotiate (loans, bills, suppliers)

5) There will be Government money

6) REI will be fine

Zach Anatta wrote: I think we can all agree that we want REI to do well.

We don't all agree :-)

jdejace wrote:

We don't all agree :-)

Agreed.

caughtinside wrote: Well at the end of 2018 they had 270 million in cash. 40 million more than they had in 2017. 2018 Financial Statement

So... they probably started march 2020 with $300 million in cash in the bank.  

Don't worry about REI.  There are plenty of businesses without those cash reserves. 

Thanks this is what I was looking for:

Billcoe wrote: REI is richer than Croesus. They'll be fine. 

And we all know what happened to Croesus...

Fat Dad wrote:

And we all know what happened to Croesus...

Refresh my memory.  Was it Covid?

I'd note as of the end of 18 they had essentially no long term debt (other than the operating leases as noted) and a $100M undrawn revolver.  

I'd also note that in my experience with REI, they tend to be in somewhat unique, customized location - not just a big box anchoring a strip mall.  This isn't universally true, but seems to check out.  If you're a landlord and thinking about which tenants to try to kick out, it's probably easier to go with a Kohl's or a Belk that can be a Target in 2 months, rather than converting some oddball space that's going to be tough to re-lease.  

REI can kick rocks for all I care.

Dylan Pike wrote: REI can kick rocks for all I care.

Glad you chimed in with that useful comment.

Zach Anatta wrote: I think we can all agree that we want REI to do well.

I don't think we can.

Why would you care about REI before you care about your little local climbing/gear shop that was hanging on by a shoe string anyway?

Marc H wrote:

Glad you chimed in with that useful comment.

Thanks. I appreciate the feedback. 

If something happened to REI we would lose this charmant forum.

Zach Anatta wrote: If something happened to REI we would lose this charmant forum.

That might make the world a better place.

The big boss is having a facebook time with all the employees today I believe. I should find out when I get home tonight.

and what is the motivation for a landlord to evict them?  To spend the money necessary to go through the eviction process so the building can sit empty waiting for another business to open shop in this environment?   No one is going to be evicted until their is a chance to fill the space or the tenant on their own is unable to pay rent.

Back of the envelope estimate is 4 months.  Given they have $270M cash on hand with annual liabilities roughly equivalent to $789M in 2018, assuming similar proportional numbers for 2019.