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Top hedge funder says retail slump is a “forever trend”

Jason Mudrick thinks bricks and mortar stores will continue to struggle
April 03, 2017 12:00PM

From TRD New York: Hedge fund manager Jason Mudrick has dire predictions for the country’s retail sector, and he’s betting big on reaping the rewards.

Mudrick, whose Mudrick Capital Management focuses on distressed investments, told Bloomberg that retailers’ problems are here to stay.

“This is a forever trend,” Mudrick said on Bloomberg TV. “When you think about how things are going to look 10 years from now, or 20 years from now, our parents will be dead, our kids will be adults — you think more people are going to be shopping online or less? This is the Amazon effect and it’s here forever.”

Mudrick Capital Management is worth $1.6 billion, according to the publication, and Mudrick Distressed Opportunity Fund gained 38.7 percent last year. The fund is just one of the many poised to profit off a tanking retail sector, which could result in a series of defaults. Mudrick is zeroing-in on securities backed by loans taken out by troubled mall and shopping center operators like Macy’s Inc. and J.C. Penny Co.

In the face of rising store vacancies, New York City retail landlords including SL Green Realty and Jeff Sutton are offering major tenant perks in order to lure tenants.

Joe Sitt’s Thor Equities, which has been grappling with a number of vacancies across its retail portfolio,  handed a $12 million “improvement allowance” to designer Tom Ford when he signed up for a 12,300-square-foot lease at 650 Madison Avenue. [Bloomberg]Miriam Hall