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Debt-laden U.S. outerwear and outdoor gear retailer Eddie Bauer LLC has hired investment banks to explore strategic alternatives, including a potential sale of the company, Reuters reported on Friday. Eddie Bauer has hired Guggenheim Partners LLC and Financo LLC to explore its options, the people said. They said the company is not currently pursuing a debt restructuring, although it is seeking relief from a $225 million term loan due in 2020 and $200 million revolving credit line that comes due in 2019. Bellevue, Washington-based Eddie Bauer, with about 370 stores in the United States and Canada, was acquired out of bankruptcy by buyout firm Golden Gate Capital in 2009 with a cash bid of $286 million.

Retailers in America lost billions of dollars in 2016, largely due to shoplifting, employee theft and other types of inventory “shrink,” according to a new survey, FoxBusiness.com reported on Friday. The new data, compiled by the National Retail Federation (NRF) and the University of Florida, said that inventory shrink grew to $48.9 billion in 2016 from $45.2 billion the year prior. The increase in losses were found to be largely due to the result of flat or declining retail security budgets. Nearly half (48.8 percent) of retailers surveyed said that they saw an increase in inventory shrink, while nearly 17 percent said it remained flat. Shoplifting accounted for the most losses, averaging $798.48 per incident, up $377 from 2015, according to the NRF survey. 

J. Crew Group Inc.’s debt restructuring can’t go forward because not all lenders agreed to it, and it seals the deal on an improper shift of trademark assets to benefit the retailers’ private equity owners, two holdouts said, Bloomberg News reported yesterday. Funds affiliated with Eaton Vance Corp. and Highland Capital Management sued J.Crew and the agent to its $1.57 billion term loan in New York State Supreme Court yesterday. They say that the agent, Wilmington Savings Fund Society FSB, needed unanimous consent of lenders for the deal it inked earlier this month; consenting to the restructuring deal and waiving potential lawsuits against J. Crew over its controversial transfer of its trademark assets last year. On Wednesday, J. Crew said that 88 percent of lenders consented to the deal.

Billionaire Eddie Lampert-controlled Sears Canada Inc. is preparing to seek court protection against creditors in the coming weeks, Reuters reported yesterday. The business may be sold off in pieces after the court filing which will likely lead to liquidation. The company had last week said that it was exploring strategic options, including a sale of the company, following years of declining sales. The company's sales have fallen every quarter since it was spun off from Sears Holdings in 2012.

Payless ShoeSource Inc. settled a dispute with its creditors yesterday, after creditors alleged that the company's private equity owners inappropriately siphoned off $400 million before the U.S. retailer's bankruptcy, Reuters reported. The case has been monitored closely by other private equity-owned companies and their creditors, because it could spark more claims against bankrupt companies over dividend recapitalizations, which involve a company borrowing money so it can pay the buyout firms which own it a special dividend. Payless' creditors had said in court filings that private equity firms Golden Gate Capital and Blum Capital, which together hold 98.5 percent of the company and control its board, received more than $400 million in dividends in recent years. Under the settlement, the shoe chain's unsecured creditors, largely its landlords and vendors, will receive $25 million in cash in the bankruptcy reorganization.

Teen apparel seller Papaya Clothing filed for bankruptcy protection Thursday, the latest mall-based chain to fall victim to changing consumer shopping habits roiling the retail industry, the Wall Street Journal reported on Friday. Papaya, a privately held California-based chain with 80 stores and some 1,300 employees, said its financial woes are the result of an industry-wide shift in consumer preferences to online shopping coupled with an ill-timed expansion in recent years. Papaya, whose corporate name is Cornerstone Apparel, Inc., brought in revenue of $134 million last year. And unlike many of its competitors that have filed for bankruptcy protection — among them Rue21, Wet Seal and American Apparel — Papaya has no secured debt. The company said in papers filed in U.S. Bankruptcy Court in Los Angeles that it will keep its doors open during its chapter 11 case. It intends to use the bankruptcy to identify the core retail stores it can reorganize around and to wring “meaningful rent concessions” from its landlords.

A move by J. Crew Group Inc. to tame its $2 billion debt load is already meeting resistance from creditors who’ve been battling the preppy clothing chain over control of its brand, Bloomberg News reported yesterday. Almost immediately after J. Crew launched an offer to exchange its 2019 notes and persuade its lenders to drop pending litigation, dissenters holding the company’s term loans started to gather signatures for an agreement to oppose their portion of the deal. The dissidents want to continue pressing their legal fight against J. Crew’s plan to move its intellectual property assets, such as the valuable brand name, to a subsidiary that’s out of reach of creditors. J. Crew, struggling from almost three years’ worth of declining sales and a debt burden following its 2011 buyout by TPG and Leonard Green & Partners LP, asked bondholders on Monday to extend the maturity of $566.6 million in notes and said that it planned to settle the IP lawsuit filed by lenders. The debt-laden retailer started a private offer to exchange 2019 pay-in-kind notes for an equity stake and bonds that mature in 2021. J. Crew also made a second offer to term-loan lenders asking them to dismiss the pending litigation against the company in exchange for meaningful compensation.