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Retailers still celebrating their strongest holiday sales in years now face the less-pleasant task of disposing of billions of dollars in returned merchandise, the Wall Street Journal reported. Often, retailers offload rejected clothes, appliances and toys for pennies on the dollar through a vast ecosystem of resellers, ranging from outlet stores and online auctions to flea markets and salvage dealers. Retailing’s secondary market saw volume surge this year, reflecting both the strongest growth in holiday sales since 2011 and the rise of online shopping, where purchases are more likely to be returned. These post-retail sales, including both returns and overstocked items, totaled $554 billion in 2016, and have been growing at about 7.5 percent a year, according to Zac Rogers, an operations and supply-chain professor at Colorado State University’s business school.

Treasury Secretary Steven Mnuchin said yesterday that President Donald Trump “feels strongly” that the U.S. should impose a sales tax on purchases made over the Internet, Bloomberg News reported. Mnuchin, speaking at a hearing before the House Ways and Means Committee, said that he has spoken personally with Trump about the issue, and that the president “does feel strongly” that the tax should be applied. The prospect of an online sales tax has been a long-standing point of contention between Internet-based retailers and their brick-and-mortar rivals. Trump has previously gone after Internet giant Amazon.com Inc., saying that last year that it does “great damage to tax paying retailers.” Amazon began collecting sales taxes on purchases in all states that levy them earlier last year, despite an exemption that allows online retailers to avoid collecting them in places where they don’t have a physical presence. But Amazon still avoids charging shoppers sales taxes when they buy from one of its third-party vendors — sales that make up about half the company’s volume. 

Family-run Nordstrom Inc. has been investing heavily as it tries to outrun the forces battering the retail industry, the Wall Street Journal. It is revamping some of its 122 department stores and spending more than $500 million to gain a toehold in Manhattan. It has snapped up e-commerce companies including flash sale website HauteLook and subscription service Trunk Club. And it has launched new concepts, including a store in Los Angeles called Nordstrom Local that doesn’t stock any clothes. So far, those efforts have failed to pay off in rising profits. As Nordstrom has been ramping up capital spending, revenue for the six years ended in January 2017 increased by more than half to $14.76 billion, but profits over that period fell. Much of the revenue growth has come from opening Rack off-price stores and e-commerce. Sales at the department stores have declined each year since 2012. The company is scheduled to report results for its recently completed year on March 1.

Accessories retailer Charming Charlie LLC won court approval to put its bankruptcy reorganization plan to a creditor vote following negotiations that led to a settlement with unsecured creditors, WSJ Pro Bankruptcy reported. Bankruptcy Judge Christopher Sontchi yesterday approved moving forward with the plan. The mall-based retailer sought chapter 11 protection in December after months of “flying the plane way too close to the ground,” one of the company’s attorneys previously said in regards to Charming Charlie’s dwindling cash balance. Like many other retailers that sought bankruptcy protection in 2017, Charming Charlie has blamed its financial woes on the major challenges facing the overall industry — namely the consumer shift to online shopping.

Sears Canada Inc. creditors are targeting Eddie Lampert, its former controlling shareholder and the chief executive of its U.S. namesake Sears Holdings Corp., over payments he received before the Canadian business collapsed last year, WSJ Pro Bankruptcy reported. A group of unhappy pensioners served court papers on Friday in Ontario’s Superior Court of Justice asking for the appointment of a trustee in Sears Canada’s bankruptcy proceeding for the purpose of digging up additional funds for creditors. The proposed trustee would scrutinize nearly $3 billion in shareholder dividends paid out since 2005, of which Lampert and his hedge fund ESL Investments Inc. were “major beneficiaries,” according to the papers.

A developer with grand plans to build the $400 million iSquare Mall + Hotel on International Drive in Orlando, Fla., has been accused of commingling funds in a bankruptcy case, which the lender says was filed in a “lack of good faith,” the Orlando Sentinel reported. The lender is asking a judge to throw out the bankruptcy, which could allow it to seize the property where Abdul Mathin planned to build iSquare. That would spell an end to Mathin’s iSquare plan, at least in that location. He had planned to demolish the 1980s-era International Shoppes retail center and build iSquare on the property. The Delaware lender, Elizon DB, is objecting to the bankruptcy of International Shoppes, which is owned by Mathin.

Struggling retailer Toys “R” Us Inc. is seeking bankruptcy court approval to close two stores badly damaged by Hurricane Maria in Puerto Rico, after reaching settlements with landlords of the properties, while repairing three other locations, WSJ Pro Bankruptcy reported. Toys “R” Us has been assessing the damage done to its five stores in Puerto Rico, which were affected by the hurricane shortly after the company sought chapter 11 protection in mid-September. The retailer decided to repair and continue operating three of its stores, and would reject the unexpired leases for two of the stores that would see the costs outweigh the value of repairs, according to court papers filed on Thursday. Toys “R” Us estimated that it would collectively cost about $4.3 million to repair both of the locations, which would take an estimated year for both of the stores.

The operator of casual Italian dining chain Romano’s Macaroni Grill won approval to move forward with its reorganization plan, which will see many of its locations and jobs saved, WSJ Pro Bankruptcy reported. Bankruptcy Judge Mary Walrath on Wednesday signed off on the plan, about four months after the company, Mac Acquisition LLC, sought chapter 11 protection. The plan will allow many of the chain’s restaurants to remain open, as well as save roughly 4,600 jobs. In 2017, Macaroni Grill closed 37 unprofitable locations. In total, Macaroni Grill had about 93 restaurants in 23 states.

Southeastern Grocers LLC, the company behind the Bi-Lo and Winn-Dixie supermarket chains, is gearing up to hire consultants to close more stores, WSJ Pro Bankruptcy reported. The company had already closed 48 stores in the past 18 months, bringing its total store count to 702 stores as of last September. It couldn’t be determined how many more stores the grocery chain is planning to close. The company also has a coupon payment due on one of its two note tranches on Feb. 15. If the company elects not to pay the coupon on Feb. 15, it could be a sign that the company is getting closer to deal with large bondholders to restructure its $1.2 billion of debt. The beleaguered discount grocery chain has also been reaching out to debt investors since December to refinance another $425 million in senior bonds which mature in 2019. 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. 

Bon-Ton Stores Inc. won court approval to begin using its $725 million bankruptcy loan, giving the struggling retailer some leeway to operate its stores while under chapter 11 protection, WSJ Pro Bankruptcy reported. Bankruptcy Judge Mary Walrath of the U.S. Bankruptcy Court in Wilmington, Del., yesterday signed off on the use of the bankruptcy loan provided by Bon-Ton’s prepetition lenders, which include Bank of America N.A. and Wells Fargo N.A. With the additional capital from its bankruptcy loan, Bon-Ton aims to stave off liquidation and find a buyer. The company does have plans to close stores, however. Last week Bon-Ton said it would be shuttering more than 40 of its 260 stores. 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.