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A glimpse at a possible future for J.C. Penney Co. can be found in Hurst, Texas, where a remodeled store has a fitness studio, a videogame lounge and style classes, the Wall Street Journal reported. But don’t expect your local Penney store to get this new look soon. The struggling retailer plans to test ideas at this store before rolling them out to other locations. Remodeling all 850 stores would be a strain on the cash-strapped company, analysts say. Chief Executive Jill Soltau, who took the reins just over a year ago, also is focused on getting back to basics. She is making stores easier to shop by removing piles of excess goods and getting out of less profitable categories such as appliances. And in about 10 percent of its stores, she is grouping products by lifestyle; rather than display all women’s tops together, for example, they would be categorized by activity: work, active, casual and dress. J.C. Penney’s revenue fell to $12 billion in the fiscal year that ended in February, down from nearly $20 billion in 2007. Penney has lost money every year since 2012. Penney also is saddled with about $4 billion in debt, the result of a failed makeover by previous management. While it doesn’t have significant repayments due until 2023, it has hired advisers to explore a potential debt restructuring.

Creditors of Barneys New York Inc. said Authentic Brands Group’s offer to buy the luxury retailer out of bankruptcy is really a “liquidation bid” that would eliminate most of the company’s 2,000 employees, WSJ Pro Bankruptcy reported. A rival bid from a group led by retail veteran Sam Ben-Avraham would keep at least five Barneys stores open, but it was neither higher nor better than Authentic Brands’ bid by the time of the bid deadline last week, lawyers for the official creditors’ committee said in court papers filed yesterday. Barneys last week decided that the bid from Ben-Avraham’s group didn’t qualify as a competing offer and canceled an auction for the retailer that would have pitted the two bidders against each other. Authentic Brands teamed up with investment firm B. Riley Financial Inc. to take the Barneys name while eliminating most of its employees and liquidating its stores through B. Riley affiliate Great American Group, the unsecured creditors’ committee also asserted. Read more. 

In related news, even some of the world’s toniest luxury-makers are speaking up on behalf of workers threatened by store closures, Bloomberg News reported. Their concern is highlighted in a court statement from a group of Barneys New York Inc. creditors, which include high-end brands like Gucci and Prada, in support of a bid that would keep more of the bankrupt retailer’s existing stores open. Preserving those outlets “would inure to the benefit of the thousands of employees — many who live paycheck to paycheck,” not to mention vendors, landlords and customers, according to the document filed Wednesday by the official committee of unsecured creditors. Concerns about workers displaced by retail bankruptcies and liquidations have gained prominence since former employees at Toys “R” Us Inc. organized to demand promised severance pay after that retailer collapsed. The group caught the attention and support of prominent lawmakers, including presidential candidates and Sens. Elizabeth Warren (D-Mass.) and Cory Booker (D-N.J.). While bankruptcy auctions typically are won by the highest bidder, the Barneys creditors argued that “societal needs — such as preservation of employee jobs — are an appropriate consideration in weighing competing offers.” Read more. 

Avenue Stores LLC’s creditors want Versa Capital Management LLC to open its books as part of a probe into allegations of fraud and other wrongdoing against the bankrupt retailer’s private-equity owner, WSJ Pro Bankruptcy reported. Unsecured creditors are asking a judge to order the women’s apparel retailer and Versa Capital to turn over documents that could be key to their investigation, according to papers filed in U.S. Bankruptcy Court in Wilmington, Del. So far, Versa Capital has delivered more than 4,500 pages of documents to the committee, but only a small number are relevant to the investigation, creditors’ lawyers say. The committee is alleging that there are key papers that are being withheld, demonstrating Avenue’s and Versa’s “apparent refusal” to turn over pertinent information during the discovery process. The committee representing creditors believes it can pursue a host of claims — including fraudulent transfers, breach of fiduciary duty and payment of an unlawful dividend — against the private-equity firm. Versa bought Rochelle Park, N.J.-based Avenue out of bankruptcy in 2012 for about $32 million. The retailer filed for bankruptcy again in August and announced it planned to close all of its 222 stores. The committee’s investigation includes a look into the relationship between Avenue and Versa before the bankruptcy, including cash infusions and Versa’s involvement in the day-to-day management of Avenue. The committee is also asking for more time to challenge liens under Avenue’s debtor-in possession loan. Bankruptcy Judge Laurie Selber Silverstein is scheduled to hold a hearing on Nov. 13 about the document request and the challenge period extension.

The parent of Sears has hired investment bankers to advise it on potential asset sales, including the DieHard brand, as the chain continues to struggle, the Wall Street Journal reported. Transform Holdco LLC, a holding company created by the financier Eddie Lampert that bought the Sears and Kmart chains out of bankruptcy, has hired Guggenheim Partners to advise on the potential sales, after receiving inquiries from buyers. The chains are still facing many of the same problems they had before filing for bankruptcy protection last year. Those include falling sales as shoppers shift to competitors and convincing suppliers nervous about the chains’ future to keep shipping goods. About a quarter of the 425 remaining stores will close by year-end. Transform recently borrowed $150 million from lenders, including Lampert, who also ran Sears and Kmart before the chains filed for bankruptcy. The stores have been having trouble keeping shelves stocked with key products such as garden supplies in spring and lawn mowers in summer, according to shoppers and former executives. Prior to the bankruptcy filing, Sears had been selling assets, including some of its real estate and iconic brands. The Craftsman tool brand was acquired by Stanley Black & Decker Inc. in 2017.

Former executives of the now-defunct athletic gear maker Performance Sports Group Ltd. are looking to force out the court-appointed liquidating trustee before he can sue them, WSJ Pro Bankruptcy reported. The group of former executives and board members sued liquidating trustee Theseus Strategy Group LLC and its managing director Mark Palmer, claiming that he is threatening to sue them in an effort to make more money from fees by prolonging the case, according to papers filed Wednesday in U.S. Bankruptcy Court in Wilmington, Del. Performance Sports, the former manufacturer known for the Bauer brand of hockey gear, Cascade brand of lacrosse gear and Easton baseball equipment filed for bankruptcy in October 2016. Most of its assets were bought out of bankruptcy by an acquisition vehicle co-owned by Sagard Capital Partners LP and Fairfax Financial Holdings Ltd. for $575 million. In December 2017, Performance Sports won confirmation of its chapter 11 plan, which called for the creation of the trust. According to the lawsuit, New York-based Theseus has conducted a “meritless and hindsight-based effort to second guess” Performance Sports’ former leaders. The accusations are allegedly a calculated move by the trustee to prolong its tenure and allow Palmer to continue making up to $150,000 a year, according to the lawsuit.

LVMH, the world’s biggest luxury group, said today that it had approached Tiffany & Co about a possible takeover of the U.S. jeweler, Reuters reported. “In light of recent market rumors, LVMH Group confirms it has held preliminary discussions regarding a possible transaction with Tiffany,” the company said in a statement. “There can be no assurance that these discussions will result in any agreement.” LVMH, which owns the Louis Vuitton and Bulgari brands among others, is said to have proposed a bid valuing Tiffany at about $120 per share. That would be equivalent to a $14.5 billion acquisition offer - which would make it the acquisitive French group’s biggest purchase to date.

Luxury retailer Barneys New York Inc. is close to being sold to licensing firm Authentic Brands Group LLC after a competing bid from a trade show executive failed to qualify for a bankruptcy auction, Reuters reported. Authentic Brands had agreed with Barneys to be its so-called stalking-horse buyer, setting the floor for other offers. Now that a bid from Israeli businessman Samuel Ben-Avraham has failed, Barneys plans to cancel an auction scheduled for Monday. Authentic Brands’ $271 million offer for Barneys is expected to close on Oct. 31, the brand-development company said. Its plan for Barneys includes shops within existing Saks Fifth Avenue locations. Authentic Brands, which owns Nine West and Juicy Couture, will also keep certain Barneys brick-and-mortar locations open depending on negotiations with landlords.

Private-equity firm Bristol Capital Advisors LLC has won an auction to purchase boutique candy retailer Sugarfina Inc. out of bankruptcy, WSJ Pro Bankruptcy reported. Los Angeles-based Bristol’s investment vehicle, Sugarfina Acquisition Corp., was the successful bidder at the auction conducted by Sugarfina on Tuesday, according to a bankruptcy court filing. The winning bid was for about $15.1 million, Bristol’s co-founder Diana Derycz-Kessler said yesterday. The sale requires approval by Judge Mary Walrath. A hearing is slated for today in U.S. Bankruptcy Court in Wilmington, Del. Bristol was the stalking-horse bidder for Sugarfina’s assets, with a $14 million cash offer made earlier this month. Bristol’s bid replaced an earlier offer for the candy retailer’s assets from private-equity firm TerraMar Capital LLC’s holding company Candy Cube Holdings LLC, which was named as the backup bidder in the auction.

When Forever 21 filed for bankruptcy last month, the fast-fashion chain described its history in documents that read, at times, like a pitch for a memoir or a Netflix special, the New York Times reported. Photos of the company’s husband and wife founders, Do Won and Jin Sook Chang, and their two daughters appeared under headings like “Forever Striving: A Story of Grit, Determination, and Passion.” The filing emphasized the improbable success of the Changs, who immigrated to the U.S. from South Korea in 1981 and built a multibillion-dollar business from scratch. The Changs were indeed a unique success story, and Forever 21 was far from a run-of-the-mill family operation. At its peak, the retailer brought in more than $4 billion in annual sales and employed more than 43,000 people worldwide in hundreds of stores. Now it is leaving 40 countries and closing up to 199, or more than 30 percent, of its stores in the U.S. as part of its bankruptcy, and former employees and industry experts are pointing to the Changs’ insular management style as a significant reason for the collapse. They cite disastrous real estate deals and the chain’s bungled merchandising strategy in recent years.

Destination Maternity Corp. filed for chapter 11 protection and plans to close about 210 underperforming locations, bowing to declining sales brought on by online competition, changing consumer behaviors and falling pregnancy rates in the U.S., WSJ Pro Bankruptcy reported. The mall-based retailer listed $260 million in assets and $240 million in debts in a filing Monday with the U.S. Bankruptcy Court in Wilmington, Del. The Moorestown, N.J.-based company plans to start store-closing sales at 148 locations this week, pending court approval, and expects to shut them down by the end of the year. Over the past five years, revenue at Destination Maternity has declined by almost one-third. In a declaration filed in bankruptcy court, interim Chief Executive Lisa Gavales blamed its troubles on decreased store traffic, maternity clothing competition, shifting clothing styles, declining birthrates, high rent and leadership turnover.