According to a recent MarketWatch report, restaurant companies could be in for a challenging period. The skinny? Consumers are offsetting higher nondiscretionary spending needs by taking advantage of falling grocery prices. At the same time, restaurants are grappling with higher operating costs and market saturation. Economics 101, my friends. Falling demand accompanied by rising production costs spells supersized trouble. And following a string of downbeat restaurant earnings from the sector, there could be more pain to come….
Here are a few highlights from last week’s retail news.
Store closings are beginning at 59 Golfsmith locations nationwide, according to a Hilco press release.
The Retail Dive reports that J.C. Penny hit a roadblock in its turnaround efforts, with total and same-store sales going negative.
Nasty Gal filed for Chapter 11 bankruptcy protection on November 9th. The pleadings can be downloaded here.
Mette H. Kurth
Golfsmith has asked the Delaware Bankruptcy Court to approve a $1 million retention program for some of its key employees. The retention program, it says, is needed to implement its recently approved bankruptcy sale and to complete the wind down of its remaining business. The plan, if approved, will provide retention bonuses so some 127 non-insider employees.
The motion [Docket #483] is available for download here.
My secret weapon for keeping up with the retail industry? Some of the great reporting produced by my colleagues in the financial services industry!
The US Online Retail Forecast by FTI Consulting is a great resources for anyone wanting to read up on the ways that omni-channel retailers are adapting to online sales, retail winners and losers, and growth forecasts for 2017 online sales. Glean valuable retail insights. Find out what is keeping retailers up at night. And sleep a little better.
Mette H. Kurth
Another retailer comes off the bankruptcy auction block….
Following a hotly contested sale process, yesterday the bankruptcy court entered its order approving The Picture People’s sale to its prepetition lender through a designee, TPP OPCO, Inc.
The sale did not generate cash for creditors but instead was completed through a $12 million credit bid. (English translation: The lender was allowed to bid for the company by crediting its outstanding debt against the purchase price.)
The company has indicated that the sale will enable it to continue as a going concern, preserving roughly 1,200 jobs for its employees.
The credit bid, meanwhile, remains subject to attack by the Creditors’ Committee on a post-sale basis through December 9, 2016.