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Deutsche Bank AG and its co-lenders were staring at tens of millions of dollars in potential losses. The banks had promised to arrange loans to fund Apollo Global Management LLC’s buyout of discount grocer Smart & Final Stores Inc., which the private-equity firm planned to split in two, Bloomberg News reported. But worried about razor-thin margins and intense competition in the industry, many investors had shown little appetite in recent weeks for the riskiest part of the deal — a $380 million tranche tied to the company’s retail side. If the lenders couldn’t drum up interest, they’d be left on the hook for the financing. Smelling blood in the water, some funds began pitching deeply discounted offers. The banks’ confidence was wavering. Then, a huge order came in. It was from Apollo itself. In a rare move, the firm offered to buy about $100 million of the loan. While the lenders weren’t out of the woods yet, it spared them from having to swallow bigger losses.

About a year after shuttering U.S. operations, the remnant of defunct toy chain Toys “R” Us is set to return this holiday season by opening about a half dozen U.S. stores and an e-commerce site, Bloomberg News reported. Richard Barry, a former Toys “R” Us executive who is now CEO of new entity Tru Kids Inc., has been pitching his vision to reincarnate the chain to toymakers, including at an industry conference last week. The stores are slated to be about 10,000-square feet, roughly a third of the size of the brand’s big-box outlets that closed last year, the people said. The locations will also have more experiences, like play areas. The startup costs could be minimized with a consignment inventory model in which toymakers ship goods but don’t get paid until consumers buy them. It remains to be seen how much of a boost the retailer’s comeback will provide the toy industry, including giants such as Hasbro Inc. and Mattel Inc. The original Toys “R” Us, the only national toy chain, left a huge hole when it went under. It had been generating about $7 billion in sales a year in the U.S. through more than 700 locations, including the Babies “R” Us brand.

Sen. Tammy Baldwin (D-Wis.) is adding her voice to a growing list of politicians admonishing private equity’s stewardship of debt-laden retailers, Bloomberg News reported. “There are definitely active discussions” toward legislation that would address the collapse of struggling companies tied to buyout firms, Baldwin said yesterday following the release of a letter chiding Sun Capital Partners Inc. for its management of bankrupt retailer Shopko Stores Inc. “Legislation will be designed so this doesn’t happen again.” Baldwin is the latest elected official to accuse private-equity firms of loading debt onto struggling retailers while reaping the benefits at workers’ expense. The issue burst into the public sphere last year when Sen. Elizabeth Warren (D-Mass.) helped lobby for the creation of a hardship fund for workers after the collapse of Toys “R” Us Inc., and surfaced again after Sears Holdings Corp. filed for bankruptcy in October.

Teen retailer Forever 21 Inc. has hired restructuring advisers to help negotiate exits from stores and raise a new loan as the once-hot chain deals with falling sales and a cash crunch, WSJ Pro Bankruptcy reported. The chain’s founder, Do Won Chang, is looking to avert a bankruptcy filing and salvage his equity in the Los Angeles-based retailer after it used up a loan from JPMorgan Chase to cover losses rather than buy merchandise. Founded in 1984, closely held Forever 21 operates more than 700 stores in dozens of countries, where it sells low-price apparel such as $5 tops and $20 dresses. The chain’s sales have slowed after a period of rapid growth and expansion that included the opening of giant stores in cities like New York and Las Vegas.

Ascena Retail Group Inc., the company behind Ann Taylor and Loft stores, has hired liquidation firm Gordon Brothers to help conduct going-out-of-business sales at the Dressbarn chain, the Wall Street Journal reported. In May, Ascena said that it would shut down all 650 Dressbarn stores and had hired real estate advisory firm A&G Realty Partners to help with the closures. Ascena is in the early stages of shutting down Dressbarn, a process the company expects to complete by year’s end, Chief Executive Gary Muto said during the company’s quarterly earnings call on Monday. In May, Ascena sold Maurices, which sells moderately priced women’s apparel, to private-equity firm OpCapita. With the sale of Maurices and the shutdown of Dressbarn, Ascena will have exited the value fashion segment of its business.

Syracuse, N.Y.’s Destiny USA, one of the largest malls in the U.S., had the ratings on about $300 million of municipal bonds cut to junk by Moody’s Investors Service, which said that shrinking profits may hinder its ability to meet the terms of a real estate loan, Bloomberg News reported. Moody’s cut the rating on the mall-backed debt sold through a city development agency from Baa3 to Ba2, two steps below investment grade, and assigned a negative outlook, indicating the securities may be downgraded further. Destiny USA, owned by Pyramid Cos., issued bonds backed by payments in lieu of taxes by the developer in 2007 to expand its Carousel Center mall into a super-regional shopping and entertainment complex. The company refinanced the debt in 2016. Pyramid owns 15 malls, including the Palisades Center in Rockland County outside New York City.

Women’s apparel and accessories retailer Francesca’s is closing outlets and cutting costs, but has yet to make headway against the forces that have swept other store operators into bankruptcy, WSJ Pro Bankruptcy reported. The company yesterday reported three-month results that show that downward trends in sales and profits continue. This comes despite efforts to trim and refresh the operation and the hiring of Interim Chief Executive Officer Michael Prendergast, a professional with the restructuring advisory firm of Alvarez & Marsal, who took the helm of parent Francesca’s Holdings Corp. in February. The company is paring back its mall-based chain and selling off existing inventory in the second quarter, hoping to clear the shelves of old, slow-selling goods to make way for a new line of products. As of May 4, the end of its first quarter, Francesca’s operated 722 stores. That is down from 738 stores at the end of the third quarter 2018. Plans are to close 30 stores or more this year, and Francesca’s made a start in the first quarter, cutting its store count by a net of five outlets.