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As the internet continues to change shopping habits, stores across the U.S. continue to close, the New York Times reported. Less than halfway through April, American retailers have announced plans this year to shut 5,994 stores, exceeding the 5,854 announced in all of 2018, according to data from Coresight Research. Retailers in good financial shape are paring locations as their leases expire, while brands like Payless ShoeSource and Charlotte Russe are filing for bankruptcy and shutting hundreds of stores within months. Payless and Gymboree — which both filed for bankruptcy this year for a second time — account for almost half of the announced closings. “For a long time, companies have talked about the squeeze in the middle of retail, but then you see the closure of a Payless,” said John Mercer, a senior analyst at Coresight, a research and advisory firm. “There’s just so much choice now that it’s not so much always the middle.” Stores that are surviving tend to offer consumers more compelling experiences and better complement online shopping options, Mercer added. The announced closings still have a ways to go before they reach the 2017 record of more than 8,000. And openings and renovations are still taking place. Coresight has tracked announcements of 2,641 store openings by retailers in the United States this year, compared with 3,239 for all of 2018. Many of this year’s openings are dollar stores and other discount chains — areas that are less threatened by e-commerce right now. Online retailers like Warby Parker are also opening stores, though on a small scale.

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. 

Neiman Marcus Group Ltd. is poised to become the latest U.S. business to push lenders into supporting a refinancing, a trend that has raised concerns that some companies might be delaying a reckoning on unsustainable debt loads, the Wall Street Journal reported. In the coming weeks, Neiman Marcus is on track to replace around $4 billion of debt set to mature over the next two years with new bonds and loans that would mature in 2023 and 2024. The transaction isn’t a normal debt refinancing. Instead, Neiman Marcus, like many others in recent years, has offered its existing lenders a deal that would leave those that don’t participate more exposed to losses if the company files for bankruptcy down the road. In a presentation to lenders, Neiman Marcus said that its debt exchange would give it more time to increase its annual adjusted earnings before interest, taxes, depreciation and amortization, or Ebitda, by around 50 percent to at least $700 million in the next five years. After several years of declining or stagnant earnings, the company has said that it expects to start seeing meaningful improvement in fiscal 2020, according to the research firm CreditSights.

A proposed spinoff of Madewell could turn J. Crew Group Inc. into an example of what can go right for creditors of struggling retailers, instead of an epithet for everything that could go wrong, Bloomberg News reported. Lenders fought hard to retain their claim on fast-growing Madewell in 2017 when J. Crew, strapped for cash and trying to stay solvent, shuffled intellectual property beyond their reach. Now their resolve could pay off: J. Crew is mulling an initial public offering of Madewell, and it has to get permission first from those lenders. They could insist that proceeds be used to pay down their $1.4 billion term loan. “Most lenders assumed the company would do something with Madewell, which is exactly the reason why they negotiated to protect it,” Justin Smith of Xtract Research said in an interview. “The business represents a significant portion of value” and has grown with time, he said. The outcome might be good for J. Crew, too, cutting the retailer’s debt down to about $347 million of notes and making it easier to fund a turnaround. 

Houston employees of L.K. Bennett, an upscale women’s fashion retailer that counts Pippa Middleton and singer Jennifer Nettles among its customers, found themselves locked out of their store earlier this month after the retailer failed to pay rent, WSJ Pro Bankruptcy reported. Fearing other landlords would follow suit, L.K. Bennett USA Inc. filed for chapter 11 last week and on Tuesday received permission from a U.S. bankruptcy court to start liquidating inventory at store-closing sales. The company faces pressure for a tighter liquidation time frame from lender Wells Fargo & Co. L.K. Bennett USA, a subsidiary of U.K.-based L.K. Bennett Ltd., made its debut in U.S. Bankruptcy Court in Wilmington, Del., after seeking protection from creditors. Its future is linked to its U.K. parent, which last month began similar proceedings overseas. L.K. Bennett USA said that it could close its 10 U.S. stores, as well as five stores-within-a-store in Bloomingdale’s, and stop selling online “unless and until there is interest expressed in the purchase of the debtor or its assets in connection with” the U.K. proceedings.

Steve Stagner, the executive chairman, president and chief executive of Mattress Firm, has resigned from the nation's largest mattress retailer, the Houston Chronicle reported. Mattress Firm's board of directors said yesterday that it had begun the search for a new chief executive. Stagner, who began his career as the owner of the largest Mattress Firm franchisee, joined the Houston retailer's corporate office in 2005. After becoming chief executive in February 2010, he oversaw Mattress Firm's initial public offering in 2011. He stepped down as chief executive in March 2016, but remained chairman. Stagner was reappointed chief executive in March 2018, five months before Mattress Firm filed for chapter 11 bankruptcy. The company emerged from bankruptcy in November.

PetSmart Inc.’s proposed settlement of a legal dispute over transfers of shares in its Chewy.com e-commerce business has prompted a bondholder to move to stop the deal, WSJ Pro Bankruptcy reported. PetSmart’s lenders have been locked in a legal dispute with the company and private-equity firm BC Partners over the company’s transfer of shares of Chewy.com, which lenders fear weakened their claims on the fast-growing division. Last week the company said that a majority of lenders had agreed to allow the company to amend its loan documents in a way that ends the litigation, court filings show. Bondholder Capital Research & Management Co., or CapRe, said the amendment was coercive and is alleging irregularities with the way the votes were tallied, in a motion filed on Thursday in federal court in New York. CapRe, which also has a position in PetSmart’s loans, said the company didn’t give lenders enough time to decide on the changes and counted yes votes from investors who sold their positions in the loans just after giving consent on April 2. PetSmart launched the latest loan amendment to lenders on April 2, and asked for consents by the following day while keeping the option open to move up the deadline if the company received consents from a majority of loan investors earlier, according to court documents.

A pair of New York investment firms are engineering the purchase of more than 75 Shopko stores and the bankrupt retailer's headquarters and will seek to lease, redevelop or sell the properties, the Milwaukee Journal Sentinel reported. The properties include 25 in Wisconsin. At least 14 of those have been purchased, for a total of $67 million, records posted by the state Department of Revenue show. Prices and other information on the remaining 11 Wisconsin parcels were not publicly available on Friday. The investors also are buying Shopko and Shopko Hometown stores in 13 other states. Involved in the acquisitions and marketing of the properties are Monarch Alternative Capital, which specializes in distressed debt, and Raider Hill Advisors, a real estate investment and advisory firm. Monarch is the primary investor in Heartland Hill Properties — the entity that will hold the portfolio of some 5.5 million square feet of real estate. Raider Hill will oversee leasing or sale of the properties, the company announced. 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. 

Discount retailer Fred’s Inc. has hired a financial adviser as it looks to downsize its store footprint and turn around its business, WSJ Pro Bankruptcy reported. The Memphis-based retailer is working with Malfitano Partners, an advisory firm run by turnaround veteran Joseph Malfitano. Malfitano recently worked as an adviser in Toys “R” Us Inc.’s bankruptcy. As recently as this week, Fred’s executives have met with liquidation firms to discuss closing underperforming stores. There are currently no plans to close a majority or all stores. The publicly traded retailer is exploring its options to turn around its business, which has seen net sales fall in recent years. A bankruptcy filing is currently not on the table, according to sources.

To win back customers after bankruptcy, Sears wants to go back to the future. That's how Peter Boutros, chief brand officer of Sears and Kmart and president of the Kenmore, Craftsman and DieHard brands, thinks of the company's efforts to make itself relevant to today's shoppers by drawing on what made it successful in its heyday, the Chicago Tribune reported. It's the first new appeal to shoppers Sears has unveiled since its former CEO, Edward Lampert, bought the Hoffman Estates-based company out of bankruptcy in February, with a $5.2 billion bid and plans to rebuild around smaller stores and strengths in categories like appliances. Both Sears and Kmart stores have new "brand mantras" of "making moments matter" and "love where you live," respectively. They were created in-house, unlike earlier campaigns like "There's more for your life with Sears," developed with Ogilvy & Mather Worldwide and "Good Life, Great Price," developed with Young & Rubicam, said Boutros. Sears will be focusing on two core groups of customers: baby boomers who grew up trusting Sears and just need to be won back and young families who might be first-time shoppers.

Neiman Marcus Group Ltd. extended the deadline for loan and bondholders to sign on to a debt swap until the end of the week, as the retailer moved closer to getting enough support for the deal that would push out the due dates on its debt, WSJ Pro Bankruptcy reported. The company said that by the end of the day Monday, the previous deadline, 84 percent of its term loan holders and 82 percent of its bondholders had signed up to participate in the swap, which would give them new loans maturing in October 2023 and new notes maturing in October 2024. The debt-restructuring proposal needs support from 95 percent of Neiman’s lenders and bondholders to win approval outside of court. The existing loans and notes mature in 2020 and 2021, respectively. Neiman launched the debt exchange for all of its $4.7 billion in debt on March 25, and offered fees of 0.25 percent to term lenders and 1 percent to bondholders who signed on to the debt swap by April 1. The deadline for receiving the fees was also extended to Friday.