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Retailer Vitamin Shoppe Inc. recently interviewed turnaround advisers ahead of reporting disappointing fourth-quarter earnings on Tuesday, WSJ Pro Bankruptcy reported. Among the turnaround firms the struggling supplements retailer has contacted in recent weeks is Alvarez & Marsal. Vitamin Shoppe on Tuesday reported poor fourth-quarter performance. Comparable store sales fell 4.6 percent, during the quarter ended Dec. 31 and declined 6.5 percent for the full year. Net sales fell 11.8 percent to $269 million during the quarter. The supplements retailer also announced that Chief Executive Officer Colin Watts would depart at the end of May. While the Secaucus, N.J.-based supplements retailer is struggling to turn around negative sales trends, the company has relatively little debt, only a $126 million convertible note issue, which matures in 2020, and $12 million drawn on a revolving credit facility.

For years, many analysts in the retail and commercial real estate sector have predicted the death of U.S. shopping malls, but a closer look at recent industry data shows that despite sweeping closures and thinning foot traffic, malls are far from dead, MorningConsult reported. While recent reports paint a gloomy outlook — an April report from Cowen and Co. predicted that as many as 20 percent of stores at some mass and middle-market mall retailers will close in the next five years, and a Credit Suisse report from May forecast that 25 percent of all U.S. malls could shutter by 2022 — those projections don’t portend the imminent death of malls, according to other industry experts who say it’s more that the industry is correcting itself in a country that built too many retail centers over the past few decades. “Malls are coming back to where they started,” said James Hughes, a professor and dean emeritus at Rutgers University’s School of Planning and Public Policy. “They’re coming back to where they should have never left.” Read more. 

Occupancy issues are at the heart of many significant retail cases, as detailed in the forthcoming ABI publication Retail and Office Bankruptcy: Landlord/Tenant Rights, available for pre-order at the ABI Store. 

Supermarket chain Tops Markets LLC filed for bankruptcy protection Wednesday, the latest regional grocery chain to look to restructure its balance sheet as consumers move to nontraditional food retailers, WSJ Pro Bankruptcy reported. The Williamsville, N.Y., company, which operates about 170 supermarkets in New York, Pennsylvania, Vermont under the Tops name, said it plans to stay open during bankruptcy. It employs more than 14,000 people — most of whom belong to unions — and has lined up $265 million in loans to fund its business during the chapter 11 case. Tops officials said that the chain’s financial troubles come from the competitive industry and the record run in falling food prices last year that has hurt supermarket chains across the U.S. The company lost about $80 million on about $2.5 billion in revenue last year, according to documents filed in U.S. Bankruptcy Court in White Plains, N.Y.

Toys “R” Us Inc. plans to close another 200 stores and lay off a significant portion of its corporate staff following a disappointing holiday sales season, the Wall Street Journal reported. The Wayne, N.J.-based retailer recently had announced plans to close about 180 stores, affecting approximately 4,500 workers. The latest wave of closings would cut nearly in half the number of U.S. stores it had before its bankruptcy filing. The company has also walked back from a promise to offer severance to all affected employees. Managers were recently instructed to tell hourly workers that “there are no severance benefits being provided for the store-closing process.” In January, store managers were instructed to tell employees that the company would provide severance to all affected employees, including hourly workers. Read more. (Subscription required.) 

In related news, Toys “R” Us is at risk of breaching a covenant on one of its loans, intensifying concerns about its ability to emerge from bankruptcy protection, CNBC reported. The toy retailer secured a $3.1 billion loan from a group of lenders led by JPMorgan Chase prior to filing for bankruptcy protection. After a dismal holiday season, Toys “R” Us is now at risk of having too little cash to satisfy the terms of the loan. The retailer is currently in compliance with its loan terms, and has a number of options afforded to it before it does breach the covenant, the sources said. These options include getting financing elsewhere so its cash balance does not breach the loan terms, or renegotiating the debt terms with its lenders. If Toys “R” Us does breach the covenant, its DIP lenders have the option to force it to immediately pay them back, which could in turn force the retailer into liquidation. Read more. 

Occupancy issues are at the heart of many significant retail cases, as detailed in the forthcoming ABI publication, Retail and office Bankruptcy: Landlord/Tenant Rights, available for pre-order at the ABI Store. 

Menswear retail chain Bachrach Clothing is preparing to file for bankruptcy protection, less than a year from its last round through bankruptcy court, WSJ Pro Bankruptcy reported. Bachrach is currently reviewing bids from liquidation firms to close the roughly 11 store-chain as part of the bankruptcy filing, the people added. This filing would mark the retailer’s fourth time through bankruptcy court since 2006. Bachrach filed for bankruptcy protection last April in the U.S. Bankruptcy Court in Los Angeles. As part of the filing, Bachrach closed 13 of some two dozen stores in the U.S. Prior to the bankruptcy filing, however, Bachrach had closed four of its stores. Bachrach won court approval of its reorganization plan in August, shortly after blaming disappointing liquidation sales at five locations on other chains’ store-closings sales that were occurring at the same time.

Bi-Lo LLC, the supermarket company that owns the Winn-Dixie chain, is preparing for a potential bankruptcy filing as soon as next month, Bloomberg News reported. The retailer is planning to shut almost 200 stores as part of the move,  either before or after the filing. The business, which went bankrupt in previous incarnations in 2005 and 2009, may still find a way to restructure its debt out of court. Bi-Lo is laboring under more than $1 billion in debt following its 2005 buyout by Lone Star Funds. The company and its creditors have held talks to discuss a possible debt-to-equity swap, as well as alternatives such as asset sales, Bloomberg reported last year.

Macerich Co., which owns stakes in 48 shopping centers, said that it doesn’t believe retail bankruptcies will weigh as heavily on the industry as they did in 2017, with similar sentiments expressed by at least three other mall operators during their recent quarterly earnings calls, according to a WSJ Pro Bankruptcy analysis. Taubman Centers Inc., Tanger Factory Outlet Centers Inc. and CBL & Associates Properties Inc. said that whatever brick-and-mortar shakeout occurs in 2018, it might be no worse than it was in 2017 and in fact might be more benign. Bankrupt retailers occupied 850,000 square feet of space at Macerich properties last year — up from 500,000 square feet the previous year. Retail bankruptcies pose risks for landlords because they can eventually lead to store closings or rent concessions. In the fourth quarter alone, bankrupt retailers occupied 160,000 square feet at Macerich properties — “a little heavier than we had anticipated,” Chief Operating Officer Robert Perlmutter said on the earnings call. Vitamin World Inc., which went bankrupt in September, has been a Macerich tenant. Read more. 

Occupancy issues are at the heart of many significant retail cases, as detailed in the forthcoming ABI publication, Retail and Office Bankruptcy: Landlord/Tenant Rights, available for pre-order at the ABI Store.