%1

Aéropostale Inc.’s doors remain open as back-to-school shoppers hit the stores, but there is no guarantee the company will survive for long, the Wall Street Journal reported today. A planned auction of the massive store chain has been pushed back to Aug. 29 as a bankruptcy judge weighs what could be a company-ending decision for the international seller of apparel to young adults. Bankruptcy Judge Sean Lane is set to rule later this week on a dispute between Aéropostale and the private-equity firm that was at one time one of its largest backers, Sycamore Partners. Junior creditors and the company are allied in a campaign to save Aéropostale, avoiding the “loss of over 10,000 jobs, empty lease locations and disappointment for vendors,” creditor attorney Robert Feinstein said at a hearing yesterday in New York bankruptcy court. Aéropostale is pressing for a ruling that would rein in Sycamore’s power to determine the company’s fate. Sycamore contends liquidation, not a sale of the operating business at a bargain-basement price, is the best option for creditors.

Calvert Retail, a Delaware company that owns eight kitchenwares stores, could become the new owner of Chapel Hill’s (N.C.) struggling Southern Season as soon as today, the Charlotte (N.C.) News & Observer reported today. The company was the sole bidder at a bankruptcy sale on Friday morning with a $3.5 million bid. A bankruptcy judge approved the sale Friday afternoon and the deal is being expedited to close today. “We are very close to zero cash. We don’t have enough cash to operate next week if this doesn’t close,” said John Fioretti, the court approved chief restructuring officer for Southern Season. Southern Season was started in 1975 and eventually became a $30 million retail and mail order business and an anchor tenant at Chapel Hill’s University Place mall. However, it never recovered after the 2008 recession and was bought in 2011 by TC Capital Fund, which is led by Chapel Hill entrepreneur Clay Hamner.

American Apparel LLC, the U.S. teen clothing retailer known for its sexually suggestive advertising, has hired investment bank Houlihan Lokey Inc to explore a sale, Reuters reported yesterday. The sale process comes just six months after American Apparel emerged from chapter 11 protection, following the public ouster of its controversial founder and chief executive officer, Dov Charney, and a string of losses that the company has struggled to reverse. When contacted for comment, Charney said he would have to see what the asking price for his old company is before considering making a bid. Charney, with support from investors that included Hagan Capital Group and Silver Creek Capital Partners, had mounted an unsuccessful $300 million bid for American Apparel in January.

Claire’s Stores Inc. is turning to its creditors to help it avoid becoming the latest mall chain to succumb to a mountain of debt, Bloomberg News reported yesterday. The “tween” jewelry chain that’s bounced along the bottom of the junk-debt market since its 2007 buyout by Apollo Global Management, is asking bondholders to swap almost $800 million of securities for a smaller amount of new loans. The deal would chip away at the retailer’s almost $2.5 billion debt load and give it more time to boost earnings after it lost more than $500 million in three years as mall traffic declined and competition intensified from online and specialty stores.

New Jersey’s Local Finance Board approved a plan to use an out-of-state lending agency that specializes in risky securities to finance an $800 million bond sale to resurrect American Dream, the unfinished mega mall begun more than a decade ago, Bloomberg News reported yesterday. The project in East Rutherford, about 10 miles west of Manhattan, has failed to fulfill several promised grand-opening dates as developers ran out of cash. It now anticipates opening in mid-2018. The latest idea calls for public financing of $125 million more than the mall’s latest owner, Triple Five Group of Canada, proposed in May. The bonds would be sold by the New Jersey Sports and Exposition Authority to the Wisconsin Public Finance Authority, according to agency documents. The Wisconsin pass-through operation charges a fee to market tax-exempt bonds for out-of-state entities. Triple Five expects the debt to be unrated and tax-exempt, and the offering made in September, according to Tony Armlin, vice president of development and construction. The deal swelled to $800 million, he said, because issuance and construction costs have increased.

Department store giant Macy’s said yesterday that it plans to close 100 stores, a dramatic step that is aimed at helping the chain get ahead of a potentially crippling problem: America, executives say, has too many stores for the online shopping era, the Washington Post reported today. Macy’s has been steadily pruning its portfolio, often moving to close several dozen underperforming stores right after the annual holiday rush. But in dropping a summertime announcement that it will close 15 percent of its locations, the chain appears to be moving more aggressively than many of its retail industry counterparts to adapt to a fast-changing shopping environment. The company said on Thursday that it saw a 2.6 percent drop in comparable sales in the most recent quarter, a weak performance that was nonetheless an improvement over the 6.1 percent year-over-year decline it recorded in the previous quarter. The retailer’s revenue was $5.87 billion, down 3.9 percent from the same period last year.

The owner of the restaurant chains Fox & Hound, Bailey’s Sports Grille and Champps Kitchen filed for bankruptcy protection yesterday, the Wall Street Journal. Last Call Guarantor LLC sought chapter 11 protection in U.S. Bankruptcy Court in Wilmington, Del., listing debts between $100 million and $500 million. Bankruptcy Judge Kevin Gross will oversee the proceedings. The Dallas-based holding company operates 48 Fox & Hound restaurants, 23 Champps locations and nine Bailey’s restaurants in 25 states. It employs 4,700 full- and part-time employees. This marks the second time that the operator of the restaurants has sought bankruptcy protection since late 2013. At the time, the company blamed its bankruptcy filing on declining sales and rising costs during the economic downturn, which caused consumers to spend less on dining out.

Logan’s Roadhouse Inc. filed for bankruptcy in Delaware after competition from rival casual-dining chains ate into its sales, Bloomberg News reported yesterday. The operator and franchiser of over 250 roadhouse-themed restaurants in 23 U.S. states has suffered as other companies offered steep discounts and improved technology with tabletop tablets and order-ahead capabilities. The Nashville, Tenn.-based chain tried to attract diners with Southern-inspired cuisine such as bread pudding, brisket nachos and glazed chicken wings, as well as Happy Hour deals, but revenue still fell 9.9 percent to $131.3 million in the quarter ended Oct. 28. Logan’s has entered into a restructuring support agreement with revolving facility lenders and holders of over 83.9 percent of about $378 million in notes that will reduce debt by over $300 million, Keith Maib, chief restructuring officer, said in court papers. The agreement also includes exit financing, Maib said.