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Brookstone Inc.’s brand is at the center of a brewing bidding war between two brand-licensing firms, WSJ Pro Bankruptcy reported. One day after Brookstone announced it received a $35 million offer from Authentic Brands Group Inc., the company received another prospective offer from Bluestar Alliance LLC. Bluestar, which owns brands including Bebe, Tahari and Limited Too, said in court papers on Tuesday that it submitted a letter of intent with a $40 million cash offer for the Brookstone brand. The firm said its Tuesday offer was in response to the announcement of Authentic Brands’ bid on Monday. The prospective offer from Bluestar wasn’t reviewed by Brookstone’s board as of the Wednesday hearing, mainly because a majority of the board is located in China, a company lawyer said.

Tempur Sealy International Inc. escalated a legal battle with former customer Mattress Firm Inc., filing a lawsuit accusing the retail chain of selling copycat products without authorization, the Wall Street Journal reported. The complaint, filed on Tuesday in a Tampa, Fla., federal court, accused Mattress Firm of selling mattress and bedding products in the Tampa area that are “strikingly similar” in their appearance and their advertisements to Tempur Sealy’s trademarked Tempur-Pedic brand. Richard Anderson, the president of Tempur Sealy’s North American operations, said in a sworn declaration that Mattress Firm appeared to be testing a confusingly similar Therapedic brand in the Tampa market and online for the critical Labor Day sales weekend.

Specialty retailer Brookstone Inc. has got a $35 million offer for its brand name from Authentic Brands Group Inc., WSJ Pro Bankruptcy reported. The retailer, which is known for selling massage chairs, travel gadgets and other novelties at malls and airports, sought chapter 11 protection in early August with plans to sell its brand and airport stores. The offer from Authentic Brands, which would serve as an opening bid at a bankruptcy-run auction and is subject to court approval, is primarily for the brand assets. Authentic Brands, backed by private-equity firm Leonard Green & Partners, is a frequent shopper of bankrupt assets. As recently as June the retailer made its latest acquisition through a bankruptcy-run auction for brands associated with Nine West Holdings Inc. The licensing firm paid $340 million for Nine West and Bandolino brands, despite having set a much lower baseline bid. Authentic Brands ended up going toe-to-toe with DSW Holdings Inc. during the auction. Authentic Brands also owns the brands associated with Aeropostale Inc. and Frederick’s of Hollywood as results of bankruptcy-sale processes. The proposed bid for Brookstone also “includes an expressed interest” in finding a partner to keep the retail business, which includes the airport stores, open according to a news release.

As rivals stage a steady rebound from the weakness of the last few years, the Plano, Texas–based department-store chain J.C. Penney Co. Inc., has deteriorating financials, is struggling to identify its core customer and is still searching for a new chief executive, all issues that analysts say that could push it into bankruptcy if it can’t turn things around quickly, MarketWatch.com reported. Penney’s second-quarter earnings report last week delivered the latest in a string of disappointing numbers, sending shares down almost 27 percent in their biggest one-day tumble in J.C. Penney’s 40-year history as a public company. The results and lowered guidance prompted S&P Global Ratings to downgrade the company’s credit rating to B- from B, sending it deeper into speculative-grade, or “junk,” territory. The downgrade reflects “continued weak operating results, compounded by persistently ineffective inventory management that has been a primary contributor to margin pressure and, in our view, indicates increasing execution risk,” said S&P. J.C. Penney has failed to zero in on its customer base over the past few years, Chief Financial Officer Jeffrey Davis conceded on the company’s recent earnings call, and the business is hurting because of it. In its most recent quarter, the company had to discount slow-moving and excess seasonal inventory to prepare for the back-to-school season. J.C. Penney expects to reduce its enterprise inventory by at least $250 million by the end of fiscal 2019.

The sale of Toys “R” Us’s last and most valuable remaining asset, its Asia operations, has become caught up in a battle between two groups of hedge funds over the future use of the brand by stores in that region, Bloomberg News reported. One group of funds, including Cerberus Capital Management and Cyrus Capital Partners, owns notes issued by the Asian stores and would be the lead bidder for the shops. Another group, which includes Solus Alternative Asset Management and affiliates of Oaktree Capital Management, claims control over the rights to the Toys “R” Us name, because it was collateral on loans the funds had made to the company. The second group, known as the B-4 lenders, believes the Asian stores aren’t paying enough for the use of the brand and has reserved its right to sue whoever wins the auction for the shops, according to court documents. In court papers on Thursday, they asked a judge to rewrite the auction rules and argued that any bidders in the sale need to negotiate with them over how much the Asian business will pay to call itself Toys “R” Us. In their objection, the B-4 lenders used the technical language of bankruptcy law to issue a veiled warning to any bidders who try to top the $760 million opening offer made by the Cerberus group, which is known as the Taj lenders. “Bidders, therefore, will have to understand the contractual terms and causes of action in deciding how much to bid and whether to engage in direct discussions” with the B-4 lenders, the group said in its filing.

A liquidation business with ties to the family that owns the Value City Furniture and American Signature Furniture chains said it is interested in buying the Thomasville and Broyhill brands from bankrupt manufacturer Heritage Home Group LLC, WSJ Pro Bankruptcy reported. Last month, Heritage Home filed for chapter 11 with plans to sell its stable of furniture brands to help it pay down $280 million in debt. It already had a $17.4 million offer in hand for its luxury line, which includes the Hickory Chair and Pearson brands, but it hadn’t received a firm offer for the nonluxury brands, Thomasville and Broyhill, the company said in a court hearing last month.

Retail chain Mattress Firm Inc. has hired Guggenheim Partners to negotiate a debt restructuring with corporate parent Steinhoff International Holdings NV, WSJ Pro Bankruptcy reported. Guggenheim is trying to strike a deal to restructure the hundreds of millions of debt Mattress Firm owes to Steinhoff, the troubled South African owner of retail brands. The debt talks may end in an effort by Guggenheim to sell the mattress retailer. Guggenheim is early in its efforts at Mattress Firm, and no bankruptcy is contemplated currently. Steinhoff, which has €9.6 billion ($11.07 billion) in debt, saw its share-price plummet after disclosing accounting irregularities last fall. In July, the South African retailer got some breathing space from its creditors, reaching a deal with most of its bondholders and lenders suspending all interest payments and debt maturities for three years. Steinhoff paid $2.6 billion for Mattress Firm in 2016, with the aim of expanding its presence in the mattress industry. The sale occurred less than a year after Mattress Firm bought Sleepy’s mattress stores for $780 million.

A new study by the National Retail Federation (NRF) released yesterday said that President Trump's threat to slap another $200 billion in tariffs on Chinese good could push up prices and cost U.S. consumers $6 billion, The Hill reported. The NRF study focuses on tariffs that will hit furniture and travel goods from China, arguing that even the threat of billions more in tariffs are causing retailers to raise prices and seek out other suppliers. Retailers are urging the Office of the U.S. Trade Representative to reject Trump's plan to impose another $200 billion in tariffs on Chinese imports, which businesses have been testifying about all week in Washington, D.C. The Trump administration has proposed tariffs of at least 10 percent on $200 billion in Chinese imports and has said the tariffs might be as high as 25 percent.

Sears Holdings Corp. plans to close 46 more Kmart and Sears locations, further downsizing its bricks-and-mortar imprint nationwide, the Wall Street Journal reported. Sears said the stores it is closing, which include locations in California, West Virginia and New York, are unprofitable. The company said in a statement this week that it told employees at those locations that the stores will be closed in November. Sears said liquidation sales at closing stores will start next week at the earliest. As of May 5, the company had 894 Sears and Kmart locations.

New Lowe’s Cos. Chief Executive Officer Marvin Ellison decided to shut down a division of smaller stores and eliminate $500 million in capital projects that will be returned to shareholders, Bloomberg News reported. The decision to close all 99 Orchard Supply locations - along with a plan to revamp the inventory at the company’s namesake hardware stores — led the company to cut its annual forecast. The retailer sees home-price gains driving business and plans to cut costs while investing in “retail fundamentals.” The acquisition of Orchard Supply, with hardware stores based mainly on the west coast, accelerated the company’s expansion into key markets like California. But it came at a price as the chain, which Lowe’s purchased out of bankruptcy for about $205 million, was often a drag on results. For the shutdown of the unit, to be completed by the end of this year, Lowe’s took a $230 million charge last quarter, and it expects additional costs of as much as $475 million in the second half of the year.