The new Sears has sold the DieHard battery brand to Advance Auto Parts for $200 million, RetailDive.com reported. Under the deal, Sears could continue to sell the DieHard brand in its existing channels through a supply agreement with Advance. Sears would also get an exclusive, royalty-free, perpetual license to develop and sell DieHard branded products in non-automotive categories. Peter Boutros, president of the Kenmore, Craftsman and DieHard unit, said that those could include sporting goods, lawn and garden, and work wear, among other possibilities. Advance Auto Parts CEO Tom Greco praised the DieHard brand reputation and said that his company sees opportunity to extend it into other automotive categories.
Since 2016, up to $800 in foreign goods shipped to an individual shopper in the U.S. are exempt from tariffs that predated the recent trade wars. The exemption allows consumers to avoid the shipping charge or higher price that American retailers often apply to recover the tariff cost, the Wall Street Journal reported. It also gives an edge to Chinese sellers that ship directly to consumers in the U.S. — all the more so with the Trump administration’s trade action. U.S. shoppers can buy straight from China by seeking out a manufacturer who ships directly to their address or by searching digital storefronts at online marketplaces such as Amazon, AliExpress and eBay. Not all China-made items sold through such storefronts are tariff-free; some merchants import in bulk and store the items in U.S. warehouses to facilitate delivery to customers. Experts say the volume of direct shipments from China to U.S. consumers for purchases under $800 remains very small, but government data suggests that the category of goods is growing.
After a tumultuous year that has included more than 9,200 store closures and the liquidation of chains like Payless ShoeSource, Gymboree and Charlotte Russe, a slew of national retailers are heading into 2020 on thin ice, USA TODAY reported. When you combine digital disruption with "a certain amount of Darwinism" that leads to "natural selection" every year in the ultra-competitive retail sector, it's a recipe for upheaval, said Charlie O'Shea, a vice president and lead retail analyst at Moody's Investor Service. As of Dec. 5, Moody's listed 17 retail or apparel companies with credit ratings of Caa1 or lower, the level at which companies are considered a big risk for lenders.
TOMS Shoes LLC’s creditors have agreed to take over the maker of casual footwear in exchange for restructuring its debt, Reuters reported. Credit ratings agencies had warned that TOMS, which is known for its charitable giving, would not have been able to repay a $300 million loan due next year without renegotiating it with its creditors. The Los Angeles-based company has struggled to keep up with competitors lowering their prices, as the novelty of its “One for One” model of donating a pair of shoes for each one sold wears off among consumers. The group of creditors, led by Jefferies Financial Group Inc., Nexus Capital Management LP and Brookfield Asset Management Inc., will take over ownership of TOMS from its founder Blake Mycoskie and private equity firm Bain Capital, according to the letter. In exchange, the creditors will provide debt relief to the company. Bain had acquired a 50 percent stake in TOMS five years ago, valuing the company at $625 million, including debt. Mycoskie owned the remainder. It is not yet clear whether Mycoskie will continue to have a role with the company given that he will no longer be an owner.
Barneys New York Inc. has stopped offering clearance merchandise on its websites, which now redirect to Saks Fifth Avenue’s sites, Bloomberg News reported. The retailer suspended closeout sales on Barneys.com and Barneyswarehouse.com sites and is transferring the remaining goods to Barneys stores slated to close, according to a representative for B. Riley Financial Inc., the firm handling the liquidation sales. Clearance at those stores will continue through January and possibly into early February. Barneys, which filed for bankruptcy in August, is closing most of its stores after Authentic Brands Group LLC won court approval to buy it. Authentic, which owns and operates consumer and celebrity brands, plans to open Barneys shops inside about 40 Saks Fifth Avenue stores. Users who type in the previous Barneys domain names now see pages reading Barneys at Saks or Saks Off Fifth.
The August bankruptcy filing of Barneys New York marked the downfall of a beloved luxury retailer. Within months, with Kirkland & Ellis and Katten Muchin Rosenman leading restructuring efforts, the company known for catapulting up-and-coming designers into the mainstream closed 15 of its 22 stores and announced that the rest would shutter, too. But emerging from the brand’s liquidation was a valuable asset, according to an analysis from the American Lawyer. It wasn’t the inventory — luxury goods selling at steep discounts — or real estate, which had become an ever-greater burden as rents rose. Instead, it was Barneys’s intellectual property, which was purchased at the beginning of November for $271 million by Authentic Brands, the company that also owns the IP of other ill-fated retailers such as “tween” clothier Aérpostale, shoe store Nine West and <em>Sports Illustrated</em>. “The IP is an enormous consequence in the way a business is run today,” said Alan Behr, who chairs Phillips Nizer’s fashion practice in addition to being a partner in the firm’s corporate and business law department and intellectual property practice. He is also editor-in-chief of the firm’s fashion law blog. “[IP] is the goodwill pertinent to the trademarks — and it can be the largest item when things are sold off.” As high-profile retail restructurings have flooded the nation’s bankruptcy courts in recent years, IP in many cases ends up being a valuable, sought-after asset — and the Big Law firms handling these high-dollar cases are tapping their experienced IP attorneys to navigate this element of the restructuring process.
Americans have accumulated near-record levels of credit card debt over the past year as card companies have increased interest rates and fees, the Washington Post reported. The booming market is helping drive record banking industry profits but could become increasingly costly for consumers who do not pay off their bill every month or miss a payment, industry experts say. JPMorgan Chase, the country’s largest bank by assets, and Citigroup reported that credit card sales were up 10 percent and 5 percent, respectively, in the third quarter. Profits at Visa were up 17 percent in its most recent fiscal year, while Mastercard reported an 11 percent profit jump in its most recent quarter. To be sure, despite increasing debt loads, delinquency rates remain relatively low. About 6 percent of consumers were late on a payment this year compared with 15 percent in 2009, according to WalletHub. Consumers have yet to balk at the relatively high interest rates, industry experts say.
U.S. shoppers spent more online during this year’s holiday shopping season, a report by Mastercard Inc. showed, with e-commerce sales hitting a record high, Reuters reported. The holiday shopping season is a crucial period for retailers and can account for up to 40 percent of annual sales. But this year, Thanksgiving, which traditionally starts the U.S. holiday shopping period, was on Nov. 28, nearly a week later than last year, leaving retailers with six fewer days to drive sales between Thanksgiving and Christmas. E-commerce sales this year made up 14.6 percent of total retail and rose 18.8 percent from the 2018 period, according to Mastercard’s data tracking retail sales from Nov. 1 through Christmas Eve. Overall holiday retail sales, excluding vehicles, rose 3.4 percent.
The parent company and most of its affiliates operating the Baton Rouge-based Shoppers Value grocery store chain across south Louisiana have filed for chapter 11 protection and reorganization, The Advocate (La.) reported. “They plan to reorganize and continue operations,” said William K. Steffes, an attorney with Steffes, Vingiello & McKenzie, LLC. Initial court filings were made in mid-November, with additional stores within the chain joining the bankruptcy proceeding this week, citing debt tied to the purchase and rebranding of six former Winn-Dixie locations in 2018, five of which have since closed. Shoppers Value's business model is touted as a 10 percent retail mark-up at the register on top of the wholesale price it pays for products, according to its website. The parent company owns and operates 12 grocery stores — more than half of which are in Baton Rouge — and one Food Depot in Bogalusa. It employs more than 600 workers, records show.
Dozens of retailers filed for bankruptcy over the past decade amid colossal changes in Americans' consumption habits, according to an analysis from Business Insider. The bankruptcies spanned a broad spectrum of retailers, including RadioShack, American Apparel, Borders, Blockbuster and Sears. Many of these bankruptcies resulted in mass store closings that have helped send hundreds of shopping malls into years-long downward spirals, from which some malls never recovered. Some retailers emerged from bankruptcy with smaller physical footprints, while others ended up liquidating. The analysis takes a look at some of the biggest bankruptcies of the past decade.
