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J.C. Penney Co. Inc. has hired advisers to explore debt restructuring options that would buy more time for the money-losing U.S. retailer to forge a turnaround, Reuters reported. The 117-year-old department store chain’s move represents a high-stakes attempt to get its financial house in order before its cash coffers dwindle and its debt, totaling roughly $4 billion, comes due in the next few years. The Plano, Texas-based company faces fierce competition from discount retailers such as the TJX Cos Inc.’s Marshalls and T.J. Maxx chains, and J.C. Penney has struggled to boost the profile of its e-commerce business to rival established players such as Amazon.com Inc. While J.C. Penney has more than $1.5 billion available under a revolving credit line, investors have continued to sell off the retailer’s shares in response to financial losses. Its credit rating is deep in junk territory, increasing its borrowing costs. The retailer, which employs 95,000 people and operates more than 860 stores, is exploring options that could include raising additional cash or negotiating with creditors to push out debt maturities. Read more. 

Occupancy issues are at the heart of many significant retail cases, as detailed in the ABI publication Retail and Office Bankruptcy: Landlord/Tenant Rights, available at the ABI Store. 

Luxury department store Barneys New York Inc. is exploring restructuring options that could include filing for bankruptcy as it struggles to keep up with higher rent and adapt to changing consumer habits, Bloomberg News reported. Barneys is working with financial advisers at MIII Partners and lawyers at Kirkland & Ellis. The company hasn’t made a final decision on whether to pursue its plan in or out of court. Founded as a men’s retailer in 1923 in downtown Manhattan, Barneys became the icon of high fashion and innovation for women and men in the 1970s. Today, Barneys New York operates flagship stores in New York City on Madison Avenue and downtown in Chelsea, as well as Beverly Hills, Chicago, Seattle, Boston, San Francisco and Las Vegas. Barneys has around $250 million of debt obligations, including a $200 million asset-based revolver led by Wells Fargo & Co. and a $50 million term loan facility.

A year after shutting all its U.S. stores, Toys “R” Us is making a comeback, the Washington Post reported. The international chain, which filed for bankruptcy in 2017, is opening two mall stores this holiday season and bringing back its website. But don’t expect the Toys “R” Us you’re used to. For one, the new locations — at the Galleria in Houston and Westfield Garden State Plaza in Paramus, N.J. —will be much smaller than their predecessors. And instead of aisles overflowing with packaged toys, the focus will be on open play areas, interactive displays and spaces for special events and birthday parties. The revamped Toys “R” Us is a joint venture between Tru Kids Brands — which acquired the Toys “R” Us brand in January — and b8ta, a chain of “experiential” consumer electronics stores. The new effort is being led by Barry and Phillip Raub, the founder of b8ta.

Restaurants Unlimited declared in its chapter 11 filing last week that “over the last three years, the company’s profitability has been significantly impacted by progressive wage laws along the Pacific coast," FoxNews.com reported. "The result was to increase the company’s annual wage expenses by an aggregate of $10.6 million.” It went on to cite three examples where minimum wages have risen dramatically over the last three years. Portland now requires $12.50 an hour, an increase of 35 percent. San Francisco’s minimum wage has climbed 41 percent to $15.59 per hour. And Seattle, the first city with a $15 minimum wage, now forces large employers to pay at least $16 an hour. Restaurants Unlimited, which is based in Seattle, did raise menu prices and even added a living wage surcharge to bills. But it still lost money. Despite the high minimum wage in Seattle, 111 new restaurants have opened in the city since May. The unemployment rate is at 3.4 percent, slightly less than the 3.7 percent U.S. jobless rate. Proponents of a higher minimum wage say Restaurants Unlimited is making worker’s pay a convenient scapegoat.

Philip Green’s fashion empire Arcadia Group said today that it received applications from legal entities of U.S.-based property group Vornado challenging two of its seven planned Company Voluntary Agreements (CVAs), Reuters reported. Arcadia said the challenges to the CVAs, which were approved in June by the majority of creditors, were “without merit” and it would defend itself against them. Vornado, a landlord to some of the Topshop and Topman stores in New York. Arcadia’s other landlords include British Land, Intu Properties, Aviva and Land Securities. CVAs have been carried out by several British retailers, including fashion chain New Look, floor coverings firm Carpetright, mother-and-baby goods group Mothercare and department store chains House of Fraser and Debenhams. Landlords of UK retail property, however, are starting to fight back against tenants proposing CVAs in order to close stores and reduce their rent burden.

U.S. luxury department store operator Barneys New York Inc. is exploring options that include a bankruptcy filing, as it struggles with high rents and changing consumer tastes, Reuters reported. The nearly 100-year-old retailer, known for its high-end designer collection, is working with law firm Kirkland & Ellis LLP to prepare for a potential bankruptcy filing that could come in the coming weeks. Barneys has not yet made a final decision on whether or not to seek bankruptcy protection, and is weighing other possible solutions for addressing high rents that are straining its business. The retailer’s flagship department store on Madison Avenue in Manhattan has weighed on its finances. Should it file for bankruptcy, Barneys would be one of the most high-profile victims of the downturn in retail, and underscore how even luxury department stores are not immune from fierce competition with e-commerce firms such as Amazon.com Inc.

Sun Capital Partners is trying to get tossed out a landlord lawsuit accusing the private-equity firm of diverting funds from defunct general merchandise chain ShopKo, WSJ Pro Bankruptcy reported. The Boca Raton, Fla.-based buyout firm said a settlement reached with creditors during the retailer’s bankruptcy protects it from legal action. It added that the landlords, as individual creditors, don’t have the standing to make the allegations stated in the lawsuit. Allegations against Sun Capital in the federal lawsuit, filed in May in Florida by landlords for nine stores, include common law fraud, unjust enrichment and conspiracy to violate the Racketeer Influenced and Corrupt Organizations Act. The landlords alleged that Sun Capital diverted funds away from ShopKo, resulting in the merchant’s bankruptcy and harming property owners in the process.

The bankruptcy judge overseeing the wind-down of Sears Holdings Corp. threatened to appoint an examiner to resolve disputes involving the new company controlled by former Sears leader Edward S. Lampert that purchased its best-performing stores out of chapter 11, the Wall Street Journal reported. Judge Robert Drain said at a hearing yesterday in the U.S. Bankruptcy Court in White Plains, N.Y., that Lampert’s Transform Holdco LLC and the Sears chapter 11 estate have 10 days to reach agreements over key issues surrounding how much money they owe each other under Transform’s $5.2 billion deal to take over hundreds of Sears and Kmart stores. Dueling lawsuits were filed in recent weeks as the old Sears prepares to settle up with creditors. The old Sears is seeking a court order to force Mr. Lampert to pay it more than $200 million to hold up his end of a bargain that allowed him to buy hundreds of stores through the retailer’s bankruptcy.

Accessories and clothing retailer Charming Charlie Holdings Inc. said it plans to close its remaining 261 stores and has permanently stopped online sales as part of its second bankruptcy filing in less than two years, WSJ Pro Bankruptcy reported. The Houston-based company, which has more than 3,300 employees, said it has “made the difficult decision to seek authority to close and wind down or conduct” store-closing sales for all of its remaining bricks-and-mortar stores. It said it made the decision after trying numerous cost-cutting moves and closing about 100 stores during its earlier bankruptcy. “These efforts simply were not sufficient to stabilize” the businesses “and ensure long-term profitability.” Some stores had been staffed by a single employee for hours on end, it said.