%1

The new owners of Buybuy Baby recently reopened 11 stores, betting that many expectant parents still prefer to shop for strollers, cribs and car seats in person, the Wall Street Journal reported. Those stores had been closed for roughly three months after former parent company Bed Bath & Beyond’s bankruptcy. The baby-products retailer plans to open more than 100 new U.S. stores over the next three years, the company said, and eventually expand internationally. That number would put the company’s store footprint on par with where it was before the chapter 11 filing. They are also working on smaller-footprint stores, which could number 200 additional locations. “Having our experts in the store assist, take the time to demonstrate products, give good recommendations and sound advice…the ability to provide that support online is limited,” said Chief Executive Pete Daleiden, who was an executive at Buybuy Baby from 2018 to 2021. He returned to the company in August to take the top job.

Mastercard Spendingpulse said on Saturday that U.S. retail sales on Black Friday rose 2.5% year-over-year excluding automotive sales, not adjusted for inflation, Reuters reported. In September, Mastercard SpendingPulse, which measures in-store and online retail sales across all forms of payment, said it anticipated U.S. retail sales, excluding automotive, to grow 3.7% during the holiday season, running from Nov. 1 through Dec. 24. E-commerce sales on Friday increased by 8.5% year-over-year as consumers shopped for deals online, while in-store sales increased by 1.1%, MasterCard Spendingpulse said. U.S. shoppers spent $9.8 billion online during Black Friday this year, according to data from Adobe Analytics, which was in line with expectations of the data and insights arm of software firm Adobe.

There are hundreds of "zombie" malls throughout the U.S. that are more dead than alive, the Wall Street Journal reported. The older, low-end ones have lost at least half and, in some cases, more than 70% of their value since the industry’s peak in late 2016, according to real-estate research firm Green Street. As values fall below the balances of their outstanding debt, owners usually stop paying the mortgages and look to either renegotiate with their lenders or hand back the keys. Green Street estimates about 150 enclosed malls have closed since the supply peaked in 2008, leaving about 950 remaining today. The firm predicts more than a third of these will close over the next 15 to 20 years. Read more. (Subscription required.)

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.

Bankrupt pharmacy chain Rite Aid Corp. has until March 1 to complete its turnaround under a timeline approved by a federal judge yesterday, Bloomberg News reported. Bankruptcy Judge Michael Kaplan scheduled a final hearing that day to decide the fate of the company’s reorganization proposal. The ruling comes after complaints that the case was moving so fast it threatened to harm lower-ranking creditors, including people who claim Rite Aid wrongly sold addictive pain killers. The company, backed by senior lenders, had urged Judge Kaplan to hold the hearing in February, arguing that the longer Rite Aid stays in bankruptcy, the more likely it is to liquidate instead of finding a buyer willing to rescue the retailer. Rite Aid faced pressure from its two official creditor committees to slow the pace of the reorganization. A panel of lower-ranking, unsecured creditors and a group representing opioid victims argued that they need more time to review the $3.45 billion loan package Rite Aid says it needs to help fund its reorganization. The company has filed a proposal built on the assumption Rite Aid will have a successful pair of auctions set for December. The heart of the proposal can’t be finished until after the sale is locked down.

Joyride Brewing in Denver said on Friday that it plans to file for bankruptcy protection, the Denver Post reported. Brewery co-founder Dave Bergen said in a video on Facebook that he is making a very public announcement as a way to remain open and honest with customers. “Joyride will be filing for Chapter 11 reorganization due to suspected financial malfeasance from a former manager,” Joyride said in its statement. “This filing has nothing to do with Joyride’s ability to run a successful and profitable business but rather, has everything to do with the improper and unauthorized spending as well as financial mismanagement from the former manager. “During this time, Joyride will be reorganizing the brewery, and Dave Bergen has stepped in as president of the company, and he will also continue his role as director of marketing and brewing. “Joyride will not be closing and everyone will still have their jobs,” the brewery added. Bergen and Grant Babb opened Joyride in 2014 at 2501 Sheridan, in Edgewater, and added a rooftop patio several years later with views of Sloan’s Lake. Bergen has served as president of the Colorado Brewers Guild and is a very active member of the local brewery community.

Rite Aid yesterday sued the U.S. Department of Justice, seeking to block a lawsuit alleging that the bankrupt pharmacy chain ignored red flags and illegally filled hundreds of thousands of prescriptions for addictive opioid medication, Reuters reported. The DOJ, which sued Rite Aid in March, agreed only to a "brief pause" of its lawsuit after Rite Aid went bankrupt last month, a position that threatens to undermine the company's restructuring efforts, Rite Aid said in a complaint filed yesterday in New Jersey bankruptcy court. Rite Aid asked U.S. Bankruptcy Judge Michael Kaplan to rule that the DOJ lawsuit cannot proceed while Rite Aid is bankrupt, which would put the government on equal footing with other opioid plaintiffs whose lawsuits were automatically stopped by the company's bankruptcy filing. The DOJ has argued that U.S. bankruptcy law does not stop it from exercising its "police powers" through its lawsuit. Rite Aid would not concede that point, and said Kaplan, who is overseeing the company's chapter 11 proceedings, should rule on that dispute rather than the judge overseeing the DOJ's lawsuit in Cleveland federal court.

Thrasio, a startup that raised billions of dollars to buy up consumer brands sold on Amazon, is preparing to file for bankruptcy as it contends with a postpandemic slump in online spending, WSJ Pro Bankruptcy reported. Consulting firm AlixPartners has advised Thrasio in recent years, and Holly Etlin, a veteran retail turnaround professional at the firm, is currently working with the company, the people said. Etlin has often served as a chief restructuring officer at bankrupt retailers, including most recently at Bed Bath & Beyond. The company has been working with law firm Kirkland & Ellis to explore restructuring options. Thrasio in 2021 said it had raised $3.4 billion in total in financing from private-equity sponsors Advent International and Silver Lake and other private-equity and venture-capital firms. At that time, the company said it was on an acquisition tear, snapping up 1.5 business a week. Thrasio was valued at $5 billion to $10 billion as of 2021. But online sellers like Thrasio, known as Amazon aggregators, have been pressured as shoppers have curtailed their online purchases since the height of the COVID-19 pandemic.

Starboard Group of Alabama LLC, a Wendy’s restaurant franchise operator in the southern US, filed for Chapter 11 in Florida, according to a court filing, Bloomberg News reported. The company listed both estimated assets and estimated liabilities in the range of $1 billion to $10 billion. By filing for bankruptcy, Starboard joins a string of companies battling a high debt load who’ve taken the step. Both pharmacy chain Rite Aid Corp. and WeWork Inc. have initiated chapter 11 proceedings in recent weeks. Starboard operates a string of fast-food and sandwich restaurants across Alabama, Florida, Illinois, Missouri, Louisiana, Wisconsin and Texas, including 73 Wendy’s outlets and 15 Subway shops, according to its website.

Consumers spent less at stores, dealerships and gas stations last month, a sign the summer spending boom is cooling heading into the holiday shopping season, the Wall Street Journal reported. U.S. retail sales fell 0.1% in October from a month earlier. That is the first decline since March and comes after a 0.9% increase in September. Declining retail sales, combined with slower hiring and easing inflation indicate that the economy is cooling after surprisingly strong growth much of this year. Americans spent less at auto dealerships as higher interest rates could deter some from making big-ticket purchases. Gasoline purchases also fell, as declining prices at the pump resulted in less spending at gas stations. Sales also declined at department, hardware and furniture stores. Consumers continued to spend more at restaurants and bars, with sales rising 0.3%, and at grocery stores and online.