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Nine West Holdings Inc. took steps forward in its bankruptcy case after winning court approval to sell its brands to licensing firm Authentic Brands Group Inc., WSJ Pro Bankruptcy reported. Bankruptcy Judge Shelley Chapman in New York signed off yesterday on the sale of the Nine West and Bandolino brands for $340 million. Last week Authentic Brands walked away the winning bidder for the assets, after going toe-to-toe with DSW Holdings Inc. The price tag was a considerable increase. Nine West sought bankruptcy protection in April with a $200 million baseline bid from Authentic Brands. The shoe retailer sought bankruptcy protection after seeing significant sales declines in recent years. In addition to selling off its intellectual property assets, Nine West’s remaining brands, including Gloria Vanderbilt, Jessica Simpson, Anne Klein and the Kasper Group, will be taken over by a group of its lenders.

Investors are taking the fight against an assault on leveraged loan documentation to the courts as more private equity-backed companies, such as troubled retailer PetSmart, seek flexibility that could lead to raising new debt, Reuters reported. Private equity firms have been able to exploit red-hot investor demand for floating rate U.S. leveraged loans and weaken loan documentation as demand continues to outstrip supply, but this has already produced at least two court cases as investors fight back. Legal conflicts have erupted among lenders to US retailers such as Not Your Daughters Jeans and J Crew in the last 12 months, as issuers added extra debt by exploiting loopholes in their credit documents. PetSmart’s owners took steps on June 4 to potentially create additional flexibility by creating a new unrestricted subsidiary and transferring 16.5 percent of its online company Chewy into the new facility.

San Antonio-based A’Gaci, the women’s fashion and accessories retailer, is moving toward emerging from bankruptcy, the San Antonio Express-News reported. A’Gaci this week received bankruptcy court approval to enter into a commitment letter for up to $12 million in financing from a Boston lender. "It’s critical for the debtor to obtain exit financing in order to emerge from Chapter 11,” Ian Peck, an A’Gaci bankruptcy lawyer, said at a Tuesday court hearing before Chief U.S. Bankruptcy Judge Ronald King approved the request. A’Gaci filed for bankruptcy protection in January, blaming its financial problems on a failed expansion, last year’s hurricanes affecting its most profitable stores, and the delayed implementation of an inventory management system. It had $82.9 million in assets and $62.1 million in liabilities the day it filed for bankruptcy, a court filing indicates.

Oaktree Capital Group is contesting Apollo Global Management LLC’s role in restructuring Claire’s Stores Inc., while Aurelius Capital Management is zeroed in on plans by Sycamore Partners to turn around Nine West Holdings Inc., according to a Bloomberg News analysis. Both funds claim that the sponsors deprived other creditors of fair recoveries, either by extracting assets before the cases reached court or through their reorganization strategies afterward. “Creditors have become more sensitive to private equity sponsors using loopholes to take value away from them,” said Anthony P. Canale, global head of research at the independent firm Covenant Review. He cited coercive debt exchanges that give cooperative creditors a higher priority than holdouts, and strategies that move valuable intellectual property out of lenders’ reach.

Sears Hometown and Outlet Stores Inc., which was spun off in 2012 by Sears Holdings Corp., said Friday it plans to close up to 100 of its 882 stores this quarter to reduce costs, WSJ Pro Bankruptcy reported. The Hoffman Estates, Ill.-based appliance, hardware and lawn-and-garden retailer announced the cuts while reporting a $9.4 million loss for the first quarter ended May 5. Chief Executive Will Powell said that proceeds from the liquidation of inventory in the stores that are closing will be used to pay down debt. Most Sears Hometown stores are run by independent dealers and franchisees. In March, Sears Hometown started a print, digital and television marketing campaign, including the company’s first-ever national TV ads, to highlight its stores, emphasizing that the locations are independently owned and run by people who don’t work for Sears.

Authentic Brands Group LLC won the auction on Sunday for the intellectual property of bankrupt U.S. shoe and accessories company Nine West Holdings Inc with a revised bid of about $350 million, Reuters reported. Authentic Brands, a brand development and marketing company, was bidding against shoe retailer DSW Inc. for the well-known Nine West brand, found in department stores. Authentic Brands had submitted an initial offer for the Nine West and Bandolino brands of $200 million, according to court papers. The proceeds from the sale will go toward paying down some of Nine West’s approximately $1.5 billion in debt.

As Toys ‘R’ Us prepares to close more than 700 stores around the country, some of them in the Chicago area won't stay dark for long, Crain's Chicago Business reported. The giant toy retailer has found takers for a small group of its stores in the Windy City after conducting two auctions for more than 400 of its locations nationwide. The fortunate few include Regency Centers, the Jacksonville, Fla.-based owner of Roscoe Square, a 140,500-square-foot shopping center on the western edge of Roscoe Village, on the city's Northwest Side. In a recent auction of 273 Toys ‘R’ Us stores and other properties, Ashley Furniture and Huntington National Bank offered to take over part of a 38,600-square-foot Toys ‘R’ Us store at Roscoe Square, according to a June 5 court filing. Regency is taking over the rest of the space, which Toys ‘R’ Us controls through a ground lease. In an earlier auction approved by a bankruptcy judge in April, Toys ‘R’ Us, which has about 30 stores in the Chicago area, was able to sell off leases for stores in Highland Park, Vernon Hills and at Bricktown Square Shopping Center on Chicago's West Side. 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. 

PetSmart Inc., the largest U.S. pet retailer, has hired restructuring advisers to explore ways to trim its debt pile of more than $8 billion as it continues to face falling profits, Reuters reported. The move comes as PetSmart’s debt trades at a deep discount to its full value amid concerns the brick-and-mortar retailer’s big bet on online commerce has yet to pay off. PetSmart told investors in its bonds on Monday that it would move part of its ownership of e-commerce website Chewy Inc. away from the reach of its creditors. PetSmart is working with investment bank Houlihan Lokey Inc. as it weighs its next steps, the sources said this week. While the company faces no significant debt maturities until 2022, it hopes to take advantage of the decline in the value of its bonds to trim its debt burden, the sources added, without specifying which specific course of action the company will take.

In its rush to find a buyer earlier this year and avoid liquidation, bankrupt Toys “R” Us Inc. landed on a familiar name: Sycamore Partners, Bloomberg News reported. The private-equity firm, which had already scooped up several troubled retailers, held advanced talks with Toys “R” Us about acquiring the chain and keeping open half its 800 U.S. locations. Target Corp. also seriously pursued buying some of the retailer’s assets, including the parent registry and website of its Babies “R” Us brand. But those potential deals collapsed in February when the retailer’s senior creditors decided there would be a better return by selling off assets during a liquidation of the U.S. retail business. By mid-March, management publicly disclosed the shutdown after a Bloomberg News report that it was preparing for that option.