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Arcadia Group, a London-based fast-fashion retailer and operator of the Topshop and Topman brands, filed for bankruptcy in the U.S., citing many of the same challenges facing much of the broader retail industry, the Wall Street Journal reported. The group on Wednesday sought court protection under chapter 15 — the section of the U.S. bankruptcy code that deals with foreign insolvencies — with plans to exit its U.S. operations and to begin liquidating inventory in its U.S. stores as soon as this weekend. The U.S. filing follows a separate insolvency process Arcadia began in the U.K., also on Wednesday. Bankruptcy Judge James Garrity Jr. will oversee the case and already has agreed to grant provisional approval of Arcadia’s chapter 15 filing. A final hearing before the judge is set for June 14.

Nordstrom Inc. yesterday cut its forecast for full-year sales and profit after reporting weaker than expected first-quarter results that were hurt by the roll out of a new loyalty program and slow sales of full-priced women’s clothing, Reuters reported. Shares of the department store operator tanked more than 9 percent in post-market trading. The Seattle-based retailer, which sells everything from apparel and footwear to home decor, saw sales at its full-price and off-price businesses fall online and in its stores, hurt by an unsuccessful roll out of its “Nordy Club” loyalty program, reduced digital marketing and products that did not resonate as well with shoppers as the company had hoped. Co-president Erik Nordstrom said on a post-earnings conference call the company stopped sending rewards “notes” to its loyalty customers by mail in an attempt to get the program online and reach customers faster. That shift caused a reduction in foot traffic at all of its stores, the executive said, as many customers rely on receiving these rewards by mail.

Women’s retailer Dressbarn said yesterday that it plans to commence a wind-down of its retail operations, including the eventual closure of its approximately 650 stores, USA Today reported. Stores remain open along with the Dressbarn website, the company said. Dressbarn is part of New Jersey-based Ascena Retail Group, whose other brands include Ann Taylor, Lane Bryant, Catherines, Cacique and Justice. The company recently sold its Maurices brand. In a separate statement from Ascena, the company said the decision has no impact on the operations of the other brands.

Hollander Sleep Products has filed for bankruptcy, citing a severe cash squeeze due in part to substantial price increases for materials, CFO.com reported. The Boca Raton, Fla.-based supplier of pillows, mattress pads and other bedding products said it has only $523,000 in cash on hand but secured lenders have agreed to provide it with $118 million to keep it operating during the bankruptcy process. A chapter 11 reorganization plan negotiated with lenders would convert about $166.5 million of Hollander’s $233 million debt burden to equity but the company said that it “will also be running a marketing process to determine whether there are alternative transactions to ensure that the company maximizes value.” Hollander, which was founded in 1953, claims to be the largest bed pillow manufacturer in the world, with an estimated 35 percent share of the $1 billion pillow market. It had $526.9 million in net revenue in 2018, producing items for licensed brands such as Ralph Lauren, Simmons, and Calvin Klein and for its own brands.

S&P Global Ratings has cut its main credit rating for David’s Bridal Inc., the 300-store Conshohocken dress chain, to CCC+, from B-, and warned it may cut again, Philly.com reported. The company’s operating performance “has remained significantly weaker than anticipated after emergence from bankruptcy, and we expect continued deterioration in the company’s profitability” over the next year, S&P said in a statement. The chain’s owners, led by private-equity firm Clayton Dubilier & Rice, gave control to creditors led by Bank of America in bankruptcy court proceedings earlier this year, after managers complained fewer Americans are buying wedding dresses, and online shoppers had been shifting to China-based competition.

Discount retailer Fred’s Inc. has hired consulting firm BRG as part of a deal reached with lenders and it is exploring options including bankruptcy, WSJ Pro Bankruptcy reported. The likelihood of bankruptcy, however, remains low because the company has enough cash to pay off landlords after closing stores. Fred’s said on Thursday that it hired an unnamed turnaround adviser as part of a forbearance agreement reached with its lenders Regions Bank and Bank of America Corp. after defaulting on its loans. Last month, the company hired turnaround advisers PJ Solomon and Malfitano Partners and liquidation firm SB360 Capital Partners. The Memphis, Tenn.-based retailer said on Thursday that it would close 104 more underperforming stores, a month after saying it would shut 159 stores. With the latest round of closures, Fred’s has fewer than 300 remaining stores across the Southeast.

Neiman Marcus creditor Marble Ridge Capital LP renewed its attack on the retailer’s pending debt exchange, telling the bond trustee that the deal violates terms of the company’s existing notes, Bloomberg News reported. Marble Ridge objects to a demand that debtholders relinquish claims to the company’s MyTheresa e-commerce asset, according to a letter sent to the trustee, U.S. Bank, and reviewed by Bloomberg. By facilitating the debt exchange, the trustee “would be giving its imprimatur to improper acts, as alleged, and purporting to abrogate claims held by both individual noteholders and any future Neiman Marcus bankruptcy estate,” according to the May 15 letter from the Brown Rudnick law firm. Marble Ridge previously brought forth a related lawsuit in state court that was dismissed. Neiman Marcus is seeking to transfer control of its fast-growing MyTheresa business to its private-equity owners, Ares Management LP and Canada Pension Plan Investment Board. The retailer launched its debt-exchange offer at the end of April, aiming to push out the maturities of its term loan and bonds and gain time for the struggling retailer to turn itself around.

A dispute between the bankrupt shell company left behind after Edward Lampert’s purchase of Sears Holdings Corp.’s top stores and a number of foreign vendors is heating up, the Wall Street Journal reported. The suppliers filed court papers last week seeking to compel payment for merchandise purchased during or just before bankruptcy and objecting to the disclosure statement, which lays out the Sears bankruptcy estate’s reorganization plan. Apex Tool Group LLC, the maker of Craftsman-branded tools; Winners Industry Co., a China-based maker of custom Christmas trees; and Gokaldas Exports Ltd. and Pearl Global Industries Ltd., both Indian apparel makers; are looking to force Sears to pay them for goods delivered after Sears entered bankruptcy or within 20 days before filing for court protection. All four suppliers argue that their claims for payment should be treated as administrative expenses, which have top priority in a bankruptcy because of the timing of the deliveries, according to court filings. The dispute has been brewing since last year and is coming to a head as the Sears bankruptcy estate attempts to wind up its affairs and get the bankruptcy court to approve a plan of reorganization that will pay out creditors, lawyers and other advisers before closing the case. Read more. (Subscription required.) 

Explore the many issues that arise when suppliers are unable to make deliveries of promised parts due to financial problems with ABI's Interrupted! Understanding Bankruptcy's Effects on Manufacturing Supply Chains.

Canadian retail operator Hudson’s Bay Co. said yesterday that it was pursuing strategic alternatives such as a sale or merger for its department store Lord + Taylor, which has struggled to attract shoppers, Reuters reported. Lord + Taylor, founded in 1826 and the oldest U.S. department store, has seen its fortunes fall while Hudson’s Bay’s luxury department store Saks Fifth Avenue has managed to increase sales.Hudson’s Bay said in a prepared statement that its plans to find a buyer for Lord + Taylor is part of efforts to focus on its “greatest opportunities.” Co-working space landlord WeWork Cos bought Lord + Taylor’s flagship on Fifth Avenue in New York City for $850 million two years ago. Hudson’s Bay has already announced plans to close up to 10 Lord + Taylor locations. The chain had 45 stores as of Feb. 2 and three outlet shops. Earlier this year, Hudson’s Bay opened a renovated main floor at the Saks Fifth Avenue flagship in New York.