The Daily Dose: What Keeps You Up at Night

 | Aug 28, 2014 | 8:30 AM EDT  | Comments
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When it comes to interviewing executives, it takes years to find your interview style. Some execs are serious, as if they are about to break major news, when all that comes out of their mouths is stuff that they've already shared on Twitter. Others employ a mix of playfulness and seriousness, often offering juicy comments that move stories forward.

As for myself, as an interviewer, I still consider myself in development. But one question I tend to ask frequently to executives is, "What keeps you up at night?" Usually the answers are spun back into a positive statement, which I fully expect, so the question serves more as a break-the-ice technique.

But, if we turn the tables on myself, here are a few things that are keeping me up around the clock even as the S&P 500 flirts with 2000.

1. Store closures: I have been combing the annual reports of mall property owners, such as Vornado (VNO) and Simon Property (SPG). A good number of retailer leases are set to expire over the next two years, so it's reasonable to expect another wave of store closures. I think these announcements -- likely on tap for early 2015 after the holiday season -- will shock the heck out of investors who just want to get back to focusing on sales and what is driving those sales. However, more stores need to be closed in order for capital to be poured back into online, mobile and same-day-delivery initiatives. That brings me to point No. 2.

2. Online: Sales through online channels continue to surge at major retailers, meaning they are growing as a percentage of a company's total business. The surge is occurring as companies are shipping merchandise from stores to online customers, among other initiatives designed to avoid missing a sales opportunity. Although retailers are pitching online sales as highly profitable, I don't see that unfolding on the bottom line. The great race to get merchandise from point A (a facility) to point B (the consumer's hands) as quickly as possible, and for the lowest price out there, is requiring companies to invest online profits immediately back into the business. I don't know, folks, it's almost as if online retailing is the ticking time bomb inside of all retailers.

3. Slowing eurozone growth: Only with a few of those companies reporting in August did I sense that geopolitical risks that have led to slowing growth in the 18-nation European Union are starting to weigh on multinational sales and profits. I feel as though geopolitical risks are something not many investors understand or factor into their decision-making process. You'd better believe, however, that if a company has 500 stores in the U.K. -- which is heavily dependent on the EU for its manufacturing base -- there is a strong risk that sales and earnings growth will cool noticeably in the second half of 2014 and in the early portion of 2015.

Lastly, thank you for all the inquiries into my interview with the Co-CEO of Chipotle (CMG) on TheStreet yesterday. What keeps me up at night regarding the burrito-maker? Culture preservation: A unique, winning attitude amongst the employee base has been a big contributor to the company's financial strength. As the chain expands globally, it will be interesting to see how the culture is preserved. Another issue involves the new entrants into the farm-to-table dining market. They are led by Chipotle-inspired millennials, and are gaining a very loyal social-media following, and a following into the restaurants during peak hours.

As for back-to-school, I will go on the record as saying this shopping season is trending a bit better than Wall Street expects. That's most notable within specialty apparel amid a host of new trends -- jogger pants for males and females, printed bottoms for women and the latest take on grunge.

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