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U.S. consumers have continued to pull back by record amounts on shopping and eating out due to coronavirus lockdowns aimed at containing the pandemic, April retail spending figures are expected to show today, the Wall Street Journal reported. U.S. retail sales, a measure of purchases at stores, gasoline stations, restaurants, bars and online, likely dropped by more than 12 percent in April from a month earlier, according to economists surveyed by the Wall Street Journal. That would eclipse an 8.7 percent drop in March sales, which was the steepest month-over-month decline in records dating to 1992. Social distancing, business closures, travel restrictions and other disruptions that started in mid-March have taken a particularly heavy toll on retail stores and restaurants, many of which remain closed or are opening gradually as states begin to reopen their economies. The Federal Reserve separately is expected to report Friday that industrial production — a measure of factory, utility and mining output, including oil and natural gas production — fell a seasonally adjusted 11.1 percent in April, which would be the biggest monthly drop in records dating back more than a century.

J. Crew and Neiman Marcus were each facing a host of issues before the coronavirus pandemic forced them to close their stores and eventually file for bankruptcy, including trouble adjusting to the rise of e-commerce and a lack of connection with a new generation of shoppers, the New York Times reported. But they also shared one increasingly common problem for retailers in dire straits: an enormous debt burden — roughly $1.7 billion for J. Crew and almost $5 billion for Neiman Marcus — from leveraged buyouts led by private equity firms. Like many other retailers, J. Crew and Neiman over the past decade paid hundreds of millions of dollars in interest and fees to their new owners, when they needed to spend money to adapt to a shifting retail environment. And when the pandemic wiped out much of their sales, neither had anywhere to go for relief except court. “Much of the difficulty that the retail sector is experiencing has been aggravated by private equity involvement,” said Elisabeth de Fontenay, a professor at the Duke University School of Law who specializes in corporate finance. “To keep up with everybody’s switch to online purchasing, there really needed to be some big capital investments and changes made, and because these companies were so debt strapped when acquired by private equity firms, they didn’t have capital to make these big shifts.” The filings by J. Crew and Neiman Marcus followed a wave of retail bankruptcies in the past few years, and came as numerous chains, including J.C. Penney, teetered on the brink because of the pandemic.

Battered by the coronavirus-shutdowns of its stores that pushed net losses to $200 million in the first three months of the year, Pittsburgh-based GNC Holdings Inc. may file for bankruptcy protection if it can not convince lenders to delay payments due May 16 on $50 million in debt, company officials said, TribLive.com reported The health and wellness products retailer will consider “all options” as it negotiates with its lenders this week and can’t predict if the talks will result in extending the deadline for payments, Ken Martindale, chief executive of told analysts in a conference call on Monday. GNC’s bottom line suffered from the closing of about 1,100, or 30 percent, of its U.S. and Canada company-owned and franchise retail stores because of Covid-19 restrictions, Martindale said. To cut costs during this pandemic, GNC has furloughed 3,800 workers, even though about 100 stores have reopened, Martindale said. Staff at the company’s headquarters have been hit as well, with about 200 employees laid off through the end of May, Martindale said.

The parent company for seafood chains Bamboo Sushi and QuickFish yesterday filed for federal bankruptcy protection, blaming the coronavirus shutdown for limiting its ability to generate revenue or get financing to make it through the crisis, <em>Restaurant Business</em> reported. Sustainable Restaurant Holdings (SRH) has received $1.9 million in financing from existing investors, including Bain Capital Double Impact Fund, to make it through the restructuring. The company has also launched a sale process. “We are facing the same challenges as many other consumer-backed businesses, especially those in the restaurant industry,” Matthew Park, president and interim CEO of SRH, said in a statement. “In this environment, we simply are not able to generate sufficient revenue to meet our day-to-day and long-term obligations.” Portland, Ore.-based Sustainable was founded in 2008 with the launch of Bamboo Sushi, a sustainable sushi chain. Eight years later, it added quick-service poke chain QuickFish. The company in 2018 received early-stage capital from Bain and Kitchen Fund, when it had six locations. The company currently operates 10 restaurants. According to a bankruptcy court filing, SRH has just over $4 million in various unsecured debt.

Uber is in talks to acquire Grubhub aiming to create one giant player in food delivery as more people turn toward those services in the coronavirus pandemic, the New York Times reported. Uber recently approached Grubhub with a potential all-stock takeover bid. In response, Grubhub asked for two Uber shares for each of its shares. That would value Grubhub’s stock at more than $60 a share, pegging a deal at around $6.1 billion, or roughly a 25 percent premium to Grubhub’s closing price on Monday. A combined Uber Eats, the ride service’s meal delivery unit, and Grubhub would have about 55 percent of the food delivery market in the U.S., according to Wedbush Securities. DoorDash, which has filed to go public and has 35 percent of the market, the firm estimated, would be its largest U.S. rival.

Neiman Marcus Group Ltd., the luxury department-store chain that filed for bankruptcy last week, expects to burn through $300 million before it can reopen its stores, WSJ Pro Bankruptcy reported. At a hearing on Friday in the U.S. Bankruptcy Court in Houston, Neiman adviser Tyler Cowan said that the overall cash burn is forecast to reach $370 million by the end of July. The chain, one of the first big retailers to file for bankruptcy amid the coronavirus pandemic, closed its stores in March, furloughing many of its 14,000 employees and reducing hours and pay for the rest. At the hearing, the retailer’s first after filing for bankruptcy, Judge David Jones signed off on a $675 million bankruptcy loan, provided by the company’s biggest lenders and bondholders to finance the bankruptcy process. The lenders providing the debtor-in-possession loan include Pacific Investment Management Co., Davidson Kempner Capital Management LP and Sixth Street Partners LLC. The three funds together hold more than $1.6 billion of Neiman’s $2.9 billion in term loans, court filings show.

Simon Property Group, the biggest U.S. mall operator, said yesterday that it would have about half of its over 200 retail properties in the country open within the next week, even as some of its major retail tenants struggle to say afloat, Reuters reported. The company was forced to temporarily close all its U.S. retail properties in March due to the COVID-19 pandemic, leading it to report over a 20 percent decline in quarterly profit and scrap its annual forecast. Simon did not disclose the percentage of total rent it had collected in April or May, key figures investors were looking for as major retail tenants cut or pause monthly rent payments to shore up cash reserves. Simon’s Chief Executive Officer David Simon declined to discuss details of negotiations the company is having with tenants over reductions in rent, but hinted at some of the tension in talks. “The bottom line is we do have a contract and we do expect to get paid,” he said. Simon also said it suspended or eliminated more than $1 billion of capital expenditure meant for redevelopment and new construction projects. The company said that it had already reopened 77 retail properties in regions where the lockdown restrictions had eased.

Stage Stores Inc. yesterday filed for chapter 11 protection, the latest casualty of the coronavirus pandemic following the collapse of luxury store chain Neiman Marcus and apparel retailer J. Crew Group Inc., Reuters reported. The discount department store operator will seek bids for the business or any of its assets, while it also begins to wind down its operations, Stage Stores said in a statement. The company listed both assets and liabilities between $500 million and $1 billion, according to a filing with the U.S. Bankruptcy Court for the Southern District of Texas. Houston, Texas-based Stage Stores was seeking to avoid bankruptcy by asking vendors for more time to pay bills and other concessions, Reuters reported last month. The company shut all its 738 stores and three distribution centers in March, along with other “non-essential” retailers, as part of efforts to curb the spread of the novel coronavirus throughout the U.S. Stage Stores said it now expects to reopen about 557 stores on May 15, about 67 stores in the second phase by May 28 and the rest by next month.

U.S. luxury department store chain Neiman Marcus Group said on Friday that it received court approval to access $675 million of its debtor-in-possession financing, which will allow continuity of the company’s business during chapter 11 proceedings and enable it to pay employees and vendors, Reuters reported. Neiman Marcus filed for bankruptcy in a federal court in Houston, and said on Thursday it had reached agreement with creditors for $675 million of debtor-in-possession financing to aid operations while it attempts to reorganize. The Dallas-based retailer plans to cede control to creditors in exchange for eliminating $4 billion of debt. Its debt currently totals about $5 billion. The company has said that it expects to emerge from chapter 11 proceedings in early fall with a $750 million package from creditors that provided its initial bankruptcy loan.

J.C. Penney Co. is negotiating a bankruptcy deal with lenders including KKR & Co., Ares Management Corp. and Sixth Street Partners that would slash the department-store chain’s debt in exchange for control of the company, Bloomberg News reported. The plan would be included in a chapter 11 court filing that could come next week. The lender group, which also includes Apollo Global Management Inc., could provide as much as $500 million to help J.C. Penney stay in business during the bankruptcy process. H/2 Capital Partners is also in talks with the company on terms of the restructuring plan, though it’s been working separately from the lender group. The firm could provide a portion of the bankruptcy loan, also known as a debtor-in-possession financing, but plans haven’t been finalized. J.C. Penney has missed two debt payments in the past month and is expected to seek court protection in the coming days when the grace periods expire. Like other retailers, it saw revenue evaporate when the Covid-19 outbreak forced stores to close.