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Rite Aid is preparing to file for bankruptcy in coming weeks to address mass federal and state lawsuits the drugstore chain is facing over its alleged role in the sale of opioids, WSJ Pro Bankruptcy reported. The chapter 11 filing would cover Rite Aid’s more than $3.3 billion debt load and pending legal allegations that it oversupplied prescription painkillers. Philadelphia-based Rite Aid hasn’t agreed on a settlement with federal, state government and private opioid plaintiffs to resolve those opioid liabilities in a potential chapter 11 and is currently planning to treat them as general unsecured claims, they said. Unsecured claims rank behind a company’s collateralized debt in bankruptcy and share in the amounts left over after secured claims are paid in full. The terms offered to Rite Aid’s opioid-related claimants in a potential chapter 11 could change. Rite Aid faces more than a thousand federal lawsuits that were consolidated into a multidistrict litigation in Ohio. The company also faces a significant number of similar cases pending in state courts that allege it contributed to the opioid epidemic, as well as a civil lawsuit by the Justice Department that alleges the company dispensed controlled substances in violation of the False Claims Act and Controlled Substances Act.

Some first-lien lenders to Joann Inc. are seeking advice from law firm Gibson Dunn & Crutcher as the fabric and crafts retailer looks to build up its cash reserves, Bloomberg News reported. Joann had about $19.7 million in cash and $61.3 million of availability under its revolver as of April 29, regulatory filings show. Its term loan due 2028 was quoted at about 47.5 cents on the dollar Thursday, according to data compiled by Bloomberg. Joann is exploring a sale-leaseback of its corporate headquarters in Hudson, Ohio. The company has undertaken sale-leaseback deals in the past and is always looking for strategic opportunities. The company has also been working with Alvarez & Marsal’s consumer & retail group since February to explore process optimization and cost savings related to store labor and information technology. It’s also getting advice from Houlihan Lokey Inc., which helped the company raise a $100 million first-in last-out facility that was completed in March.

After a post-pandemic shopping spree, some Americans are becoming more selective with their spending as they struggle with factors like inflation, the New York Times reported. Although overall consumer spending remains strong, analysts say they detect worrying shifts in shopping habits. Financial reports this past week from retailers including Macy’s, Kohl’s, Foot Locker and Nordstrom suggest that consumers are no longer buying with abandon. Executives also flagged rising credit card delinquencies and higher rates of retail theft as ominous signs that consumers could be strapped for cash.

Retailers are on track to open 1,000 net new stores in the U.S. this year as retail availability hits record lows, in fresh signs of the sector’s resilience despite turmoil in commercial real estate, the Wall Street Journal reported. Landlords say demand for retail space has remained robust this year, defying inflation pressures, high interest rates and liquidations including Bed Bath & Beyond and Christmas Tree Shops. Retail’s strength is largely the result of a sharp drop in retail construction since the 2008-09 financial crisis, which allowed the oversupplied sector to digest its existing real estate. Retailers, meanwhile, started using online sales data and analytics technology to pinpoint locations for successful stores. Also, predictions that internet sales would wipe out physical retail failed to materialize. Digitally native companies are opening bricks-and-mortar locations after reaching the limits of online customer acquisition. Shoppers flocked back to stores and restaurants as pandemic restrictions eased. As of mid-August, retailers had announced plans to open nearly 4,500 new locations while shutting about 3,500, according to advisory and research firm Coresight Research. Nationwide, the rate of available retail space fell to 4.8% in the second quarter, the lowest level in the 18 years the data has been tracked by real-estate-services firm CBRE.

A U.S. judge on Wednesday converted Christmas Tree Shops' bankruptcy to a chapter 7 liquidation, saying a court-appointed trustee should take over the bargain retail chain's wind-down and address doubts about unpaid employee wages, Reuters reported. Christmas Tree Shops filed for bankruptcy in May, hoping to keep most of its stores open while addressing its debt. But the company pivoted to a full liquidation in July after its store closing sales failed to meet revenue targets and Christmas Tree Shops defaulted on a $45 million bankruptcy loan. During a hearing before U.S. Bankruptcy Judge Thomas Horan in Wilmington, Delaware, a lawyer for Christmas Tree Shops, Harold Murphy of Murphy & King, traded barbs with an attorney for bankruptcy lender and store liquidator, Hilco Global. Murphy said that Hilco's store-closing sales missed revenue targets by $14 million. Hilco counsel Gregg Galardi of Ropes & Gray countered that the retailer's management exceeded its loan budget and told employees they would receive bonuses that Hilco never agreed to fund.

U.S. retail sales increased more than expected in July as Americans boosted online purchases and dined out more, suggesting the economy continued to expand early in the third quarter and keeping a recession at bay, Reuters reported. Retail sales jumped 0.7% last month, the Commerce Department said on Tuesday. Data for June was revised higher to show sales rising 0.3% instead of the previously reported 0.2%. Excluding automobiles, gasoline, building materials and food services, retail sales surged 1.0% in July. Data for June was revised lower to show these so-called core retail sales increasing 0.5% instead of the previously reported 0.6%. Core retail sales correspond most closely with the consumer spending component of gross domestic product.

Local leaders are trying anything they can to keep San Francisco’s struggling downtown core afloat, including paying retired, unarmed police to keep an eye out for trouble, the Wall Street Journal reported. Homelessness, drug use, and nonviolent crimes like shoplifting and car thefts are commonplace in many parts of the neighborhood. Downtown San Francisco thrived during the 2010s in large part because of the growth of the tech industry. But those employees easily transitioned to remote work during the pandemic and the majority never came back to the office full time. Under pressure to cut costs last year, tech giants like Meta Platforms and Salesforce laid off workers and cut their real estate footprints in the city. Floors of many downtown office towers now sit empty. Those changes have collided with a series of intertwined problems that have been festering in San Francisco for years, including high housing costs, street homelessness, rampant property crime, the fentanyl crisis and a precipitous drop in public transit ridership since the pandemic. Downtown San Francisco now trails nearly every other major urban center in economic health. Its 25.7% office vacancy rate is close to 10 percentage points higher than the U.S. vacancy rate of 16.4%, according to commercial real-estate firm Colliers International. Ridership to downtown on Bay Area Rapid Transit trains is one-third its 2019 level. Retailers like Nordstrom and Banana Republic have announced in the past few months that they are closing their downtown San Francisco stores. The owner of the city’s biggest mall, located downtown, is handing it back to the lender rather than continue to make debt payments. Other parts of San Francisco are recovering faster from the pandemic downturn, with full restaurants and crowded stores. But downtown has long been the economic engine of this city of 808,000, generating three quarters of the local gross domestic product.

AMC Entertainment Holdings Inc. won court approval of a stock conversion plan that had spurred a shareholder lawsuit and cast a cloud over the movie theater chain’s efforts to secure new financing, Bloomberg News reported. The settlement, approved on Friday, includes extra shares for individual investors, thousands of whom had opposed it, citing the dilution of their shares among other concerns. Many of them fueled the pandemic-era “meme stock” rally that saved AMC from a bankruptcy filing. The ruling by Delaware Chancery Court Judge Morgan Zurn caps a protracted and bitter legal fight over AMC’s preferred equity units, or APEs, which pitted the company’s top executives against part of that retail investor base. Last month Zurn surprised the market by rejecting an earlier version of the settlement, sending the value of AMC’s regular shares soaring and the APEs plunging. She found that the original deal waived too many potential claims against the company.

A local sporting goods company, which was among Louisville's fastest-growing companies last year, has filed for bankruptcy, the Louisville Business First reported. Guardian Baseball filed for chapter 11 protection with the U.S. Bankruptcy Court for the Western District of Kentucky on Aug. 3. According to the filing, the e-commerce baseball and softball equipment retailer has between $500,000 and $1 million in assets, and liabilities between $1 million and $10 million. Its largest creditors are Elan-Polo ($256,947), American Express ($155,696), Capital One ($139,784), Stinger Bat ($130,460) and Amer Sports ($119,585). Guardian Baseball, founded by Zev Bernard, president and Matt Kubancik, CEO, was No. 4 on Louisville Business First's Fast 50 list in 2022. It reported nearly 1,000% three-year revenue growth, growing from $455,000 in revenue in 2019 to $5 million in 2021.