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The coronavirus recession has left no industry unaffected, but the one-two punch of shuttered bars and mass unemployment has hit craft distilling particularly hard, the New York Times reported. In a survey of its members by the American Craft Spirits Association, more than two-thirds say they may have to close permanently in the next few months. The crisis isn’t just threatening to decimate the industry; it is also reshaping its future. “There’s going to be a lot of dead distilleries coming out of this,” said Paul Hletko, the founder and distiller of FEW Spirits, in Evanston, Ill. “Even if you survive, the new normal is going to be punishing for small brands.” For many distillers in the United States, 2020 was supposed to be a banner year. The craft-spirits boom was entering its second decade, and the number of distilleries had grown to more than 2,000. The sector employed about 25,000 people directly and supported 100,000 more jobs, according to an analysis by the American Craft Spirits Association. Sales grew by 27 percent, to $4.8 billion, in 2018, the most recent data available.

Ratner Cos., the Vienna, Va.-based parent company of hair salon chains including the Hair Cuttery, Bubbles and Cielo, has filed for bankruptcy protection after closing more than 80 locations across the country in March, the Washington (D.C.) Business Journal reported. The company and related entities, including Creative Hairdressers Inc., filed for chapter 11 in the U.S. Bankruptcy Court in Greenbelt, Md., on Thursday. In court filings, the company listed less than $10 million in assets and between $10 million and $50 million in liabilities. The company is an apparent victim of the coronavirus pandemic, which forced it to shutter many of its locations. Coronavirus notices posted March 31 to the company's Hair Cuttery and Bubbles websites indicate the chains had hoped to reopen April 1, but "unfortunately, that will not be a reality." "Creative Hairdressers has been searching for a new financial partner for some time," according to a company statement. "The impact of the coronavirus on the business accelerated this process and is a strategic move to ensure the health and vitality of our company in the future." The bankruptcy filing also follows a pair of class-action lawsuits from a group of stylists against the company in U.S. District Court. The lawsuits, one filed April 7 in the District of New Jersey and the other filed April 20 in the Florida Middle District Court, claim the company violated fair wages laws because it didn't pay stylists and employees for the pay period due April 7. That pay period included the span between March 15 and March 21, when Ratner closed all of its retail operations, according to one of the lawsuits.

J.C. Penney Co. Inc. is in advanced talks for bankruptcy funding with a group of lenders, a sign the troubled retailer is about to succumb to the economic collapse caused by the coronavirus pandemic, the Wall Street Journal reported. Penney is in discussions with existing lenders including Wells Fargo & Co., Bank of America Corp. and JPMorgan Chase & Co. for a debtor-in-possession loan that would keep the department-store chain’s operations funded during a court-supervised bankruptcy. The loan package could total roughly $800 million to $1 billion, with some of that money potentially including existing debt. The facility would likely be syndicated so that other lenders could participate. A bankruptcy filing could take place within the next few weeks. The company entered into a 30-day grace period after missing an interest payment due to bondholders on April 15. It is possible creditors enter into a forbearance agreement if the company needs additional time to iron out negotiations before filing.

California Pizza Kitchen Inc. is seeking to restructure its debt to avoid a possible bankruptcy filing, according to people familiar with the discussions, as the coronavirus pandemic decimates sales at casual-dining chains, the Wall Street Journal reported. The Los Angeles-based company has hired restructuring firm Alvarez & Marsal Holdings LLC, along with Guggenheim Partners, to facilitate deal talks with its lenders, the people said. California Pizza Kitchen’s lenders have hired FTI Consulting Inc. and Gibson, Dunn & Crutcher LLP to represent them legally. Guggenheim had been running a sales process for the chain, and five bids were submitted by earlier this year. The coronavirus crisis interrupted that process, and the company is now seeking a $30 million bridge loan as it seeks to restructure its debt over the next six months. California Pizza Kitchen, majority owned by private-equity firm Golden Gate Capital, was struggling before the coronavirus pandemic. The company was generating roughly $60 million in earnings annually after expenses as of late last year, one person familiar with its business said. It has tried to boost delivery, takeout and a new meal-kit service since closing dining rooms at its 240 restaurants as a result of the pandemic.

Ruth’s Chris Steak House yesterday became the latest of several chain restaurants to announce it will return a loan it received through the federal Paycheck Protection Program (PPP) intended for small businesses, The Hill reported. The restaurant chain received a $20 million loan through the PPP, a program included in the $2.2 trillion stimulus bill last month and managed by the Small Business Administration. The chain claimed eligibility for the aid by showing it has fewer than 500 employees at each of its more than 100 individual locations in the U.S., Canada and Mexico. Shake Shack, which obtained a loan under a similar rationale, announced it would return the funds earlier this week. Another restaurant chain that received PPP aid, Sweetgreen, also said it would return the $10 million loan yesterday. Kura Sushi announced it will return its $5.98 million loan, which it received after closing its more than 400 U.S. locations in mid-March.

Rep. Rashida Tlaib (D-Mich.) called on private equity firm Thomas H. Lee Partners to pay for health insurance for Art Van Furniture workers who lost coverage after the Midwestern retailer shut down, Bloomberg News reported. Art Van filed for bankruptcy last month and told workers they would have 90 days of coverage as the retailer slowly sold off its stores. But as the new coronavirus spread, many states forced stores to shut down, turning the company’s liquidation into more of a fire sale. The company later told employees they would lose insurance about six weeks earlier than planned. Workers sent a letter on Tuesday asking Thomas H. Lee Partners, Art Van’s private equity owner, to restore their health coverage. Tlaib, who represents a district in Michigan that includes parts of Detroit, is the latest politician to call for more help for workers at bankrupt companies. Thomas H. Lee Partners bought Art Van and its real estate in 2017 from founder Art Van Elslander for $612.5 million, according to bankruptcy documents. The private equity firm did not make back its investment on that deal by the time of the liquidation. Tlaib was a sponsor of the House of Representatives version of the Stop Wall Street Looting Act introduced by Senator Elizabeth Warren last year. That bill would put private-equity firms on the hook for the debt of companies they buy and elevate worker claims in bankruptcy.

Department store chain Macy’s is looking to raise up to $5 billion in debt financing with Bank of America is leading the transaction, Reuters reported. The financing package could comprise cash flow and asset-based components including debt secured by real estate assets. The new financing may also encompass a refinancing of Macy’s existing debt. The move comes as retailers have been forced to shutter their stores on government orders as consumers remain indoors and avoid large public gatherings to limit the spread of the coronavirus. All of Macy’s stores, including the Bloomingdales, and Bluemercury brands, have been closed since March 18, according to a company press release. Though the retailer has lost the majority of its sales due to the closures, it said the stores will remain shuttered until it is safe to reopen.

The plan to sell Victoria’s Secret to a private equity investor appears to be in trouble, with the buyer saying yesterday that it wanted to terminate the deal because of the retail chain’s response to the coronavirus pandemic, the New York Times reported. Sycamore Partners, which agreed to buy a majority of Victoria’s Secret from its embattled owner, L Brands, in February, argued its case in a Delaware court filing. The move sent the company’s shares plummeting by about 20 percent before trading of the stock was temporarily halted. L Brands, which also owns Bath & Body Works, said in a statement that it believed Sycamore’s attempt to terminate the acquisition was “invalid,” and that it planned to “vigorously defend the lawsuit” and work toward closing the deal. The public health crisis, which has hit apparel chains especially hard, has forced nonessential retailers to close stores, cut corporate salaries and furlough employees. Sycamore pointed to such actions as evidence that L Brands had violated the terms of its agreement, including the obligation to essentially conduct business as usual and to refrain from changing “any cash management policies, practices, principles or methodologies.”

Art Van Furniture, the Midwestern furniture chain, originally told its employees last month that they’d be entitled to keep their coverage for 90 days as the company kept operating and started auctioning off its retail stores, Bloomberg News reported. Then the novel coronavirus spread and more states forced stores to shutter, turning the retailer’s slow liquidation into more of a fire sale. Workers learned their health benefits were getting cut off. Art Van’s workers sent a letter yesterday to the company’s private equity owner, Thomas H. Lee Partners, asking it to pay their health insurance for 90 days, and to create a fund for out-of-pocket costs. The employees’ trouble offers a sense of what might be coming for many struggling retailers. Stores are failing fast, leaving workers in many cases with no alternative but to lobby for compensation from owners, even as they push for broader legal and legislative protections, said Jack Raisner, a lawyer who often represents workers, including in the Art Van case. Art Van filed for bankruptcy in March, but weeks later it switched to a more accelerated liquidation. With its troubles mounting, the retailer terminated workers’ health benefits without the notice otherwise required by law. The U.S.’s Worker Adjustment and Retraining Notification Act requires employers to give 60 days’ notice before mass layoffs. Some of the workers laid off in March filed a lawsuit in Art Van’s bankruptcy court citing the violation of the terms of the act.

With stores shuttered, struggling retailers are skipping rent and asking for concessions, while landlords are demanding payment and having their own tricky conversations with lenders, Bloomberg News reported. So far this month, some mall owners and other retail landlords collected as little as 15 percent of what they were owed, according to one estimate. And it’s expected to get worse, with more than $20 billion in rent payments coming due in May. “It’s all over the map what’s happening out there,” said Tom Mullaney, a managing director in restructuring at Jones Lang LaSalle Inc. “More and more defaults are coming in every single day.” Companies across the U.S. — from small mom-and-pop operations to giant corporations — have missed April payments or sent out relief requests citing store closures because of the pandemic. Landlords have been pitching rent deferment, saying tenants can make reduced payments now as long as they pay the balance at some point. Some businesses are pushing back on that option and asking for rent cuts even after stores are open again. U.S. retail landlords typically collect more than $20 billion in rent each month, according to data from CoStar Group Inc. So far, April rent collection has ranged from 15 percent to 30 percent for landlords with higher concentrations of shuttered businesses, according to an estimate from brokerage firm Marcus & Millichap. Landlords, who are facing their own debt defaults, are getting frustrated. Some are complaining that large corporations are using the crisis to skip out on rent. Others say that they’re not responsible for bailing out tenants and that the federal government or insurance companies should cover the costs instead.