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The troubled owner of Jessica Simpson’s brand is nearing a deal to sell its majority stake in the fashion line back to the singer and offload other assets as part of a potential chapter 11 bankruptcy filing, Bloomberg News reported. Sequential Brands Group Inc. had been seeking to sell off its assets to avoid a cash crunch while it negotiated with creditors, but is now preparing to unload its brands under a process that will likely take place in court. The company would use proceeds from the sales to pay back creditors including its largest lender KKR & Co. Sequential owns and licenses a portfolio of consumer labels including the Gaiam yoga line, AND1 and Joe’s Jeans. It sold the Heelys brand for $11 million in April. KKR and other lenders recently extended a waiver of existing loan defaults through July 8. Sequential has been under forbearance with its lenders since late 2020 after it said it wouldn’t be able to meet certain financial metrics required under its debt agreement due to the pandemic. Retailers and brands across the country have suffered from the impact of COVID-19 and related store shutdowns. More than 20 sought bankruptcy protection last year.

A year of remote work has forced many to rethink what post-pandemic office life will be like — including the retailer that has been dressing businesspeople for 200 years. That’s the idea behind a series of initiatives from Brooks Brothers as it plots a relaunch after exiting bankruptcy last year, Bloomberg News reported. There’s a new athleisure line, a product mix with other casual items and a mascot: Henry the Sheep. The move is overdue, said Ken Ohashi, who took over as chief executive officer in January with a plan to capture more of Brooks Brothers’s regular customers’ spending. Even before the pandemic, shoppers’ tastes were shifting away from dressier clothing and toward more casual offerings. New York-based Brooks Brothers will try by adding more relaxed shirts, suits and bottoms, with items like knits and sweaters. That’s alongside the new men’s and women’s athleisure lines including hoodies and sweatpants. The company will still use its Golden Fleece logo, but added its modernized mascot this month to represent the new vibe. Authentic Brands Group bought Brooks Brothers out of bankruptcy along with SPARC Group, a joint venture with mall owner Simon Property Group, adding it to a portfolio of other formerly bankrupt retailers including Forever 21. Authentic is preparing for an initial public offering, Bloomberg reported last month.

More than a fifth of retail space on Chicago’s Magnificent Mile is vacant after shoppers were driven away by the pandemic and unrest. Now, the reopening city urgently needs them to return, Bloomberg News reported. The corridor, one of America’s quintessential big-city shopping experiences, bolsters Chicago’s finances — the zip code where it’s located generated about $150 million from sales taxes in 2019. Last year, that plunged to around $60 million, according to local Alderman Brian Hopkins, whose ward includes the iconic stretch of Michigan Avenue. The Magnificent Mile’s decline has been even more dramatic than other downtown slumps — Chicago has emerged more vulnerable than most due to its longstanding population decline that’s shrinking the tax base, unfunded pension liabilities of more than $30 billion, and a decade-long run of budget deficits. “The vacancies are a concern,” said Chicago Alderman Scott Waguespack, who chairs the city council’s finance committee. “Those sales taxes pay for our programs. If someone buys stuff, that is funding for our budget.” Samir Mayekar, Chicago’s deputy mayor for economic and neighborhood development, said the corridor is “crucially important to the future of the city” and acknowledged the urgency of reinvigorating it.

The Biden administration on Tuesday planned to issue a swath of actions and recommendations meant to address supply chain disruptions caused by the coronavirus pandemic and decrease reliance on other countries for crucial goods by increasing domestic production capacity, the New York Times reported. In a call yesterday detailing the plan to reporters, White House officials said the administration had created a task force that would “tackle near-term bottlenecks” in construction, transportation, semiconductor production and agriculture. The officials also outlined steps that had been taken to address an executive order from President Biden that required a review of critical supply chains in four product areas where the United States relies on imports: semiconductors, high-capacity batteries, pharmaceuticals and their active ingredients, and critical minerals and strategic materials, like rare earths. The review has been governmentwide, the officials said: Cabinet members were ordered to provide reports to the White House within 100 days. The move was intended to address concerns about supply chain resiliency and long-term competition with China. The Department of Health and Human Services, for instance, will use $60 million from the $1.9 trillion coronavirus relief bill to develop technologies to increase domestic production of active ingredients in key pharmaceuticals. The Interior Department will work to identify sites where critical minerals could be produced in the United States. And several agencies will work on creating supply chains for new technologies that will reduce reliance on imports of key materials. The Biden administration also signaled that it was prepared to use trade policy to bolster domestic supplies of key minerals and components. As part of that effort, the Office of the United States Trade Representative said it would establish a so-called strike force that could propose actions against overseas companies deemed to be engaged in unfair trade practices.

Adam Aron, AMC Entertainment Holdings Inc.’s chief executive, has decided to run with the meme-stock bulls who helped his company avoid bankruptcy during the pandemic, WSJ Pro Bankruptcy reported. More than any CEO swept up in the meme-stock trade, Aron has come to represent the surrealism and opportunities of modern-day trading. He is a Harvard Business School graduate now known for sharing social-media memes of Reddit in-jokes. He has traded a Chinese real-estate firm, the Dalian Wanda Group, for three million individual investors he calls his community. He has promised the new shareholders dividends and free popcorn. And it has helped the world’s largest movie-theater chain emerge from its pandemic hole. AMC raised $587 million Thursday through another stock sale effort, its seventh in nine months, adding up to more than $2.2 billion total since it began its stock sale efforts in August. The sale comes on the heels of a recent rally that brought AMC’s share price to $72 from $10 in early May.

All of the changes for small gyms to survive the COVID-19 pandemic required more than a tutorial in Zoom; they necessitated a radical change in thinking in an industry that has been providing its product in essentially the same way since Vic Tanny’s first “health clubs” opened in the 1930s, the New York Times reported. “Prior to the pandemic, clients had to visit a brick-and-mortar business to consume the product,” said Julian Barnes, chief executive of Boutique Fitness Solutions, an advisory firm to small gyms and fitness studios. The new multiple-channel approach “means meeting your client wherever he or she is,” he said. “If she wants to work out live, give her that ability to take a class live. If she wants to work out at 2 a.m., and pull up a video of her favorite class, give her the ability to do that. If she wants to work out outdoors, give her the ability for that.” Barnes estimated that, before the pandemic, the United States had about 70,000 of these small gym and studios. “A lot of them were uprooted from their original business model,” said Tricia Murphy Madden, who is based in Seattle and is national education director for Savvier Fitness, a fitness product and education company. “What I’m seeing now is that if you’re still operating the way you did 16 months ago, you’re not going to survive.”

Victoria’s Secret is facing allegations by its landlord that the company prematurely ended its stay at the Westfield World Trade Center Shopping Center, located in downtown Manhattan, in alleged violation of a lease agreement, YahooFinance.com reported. In a complaint filed in late May in New York state court, Westfield made claims for more than $30 million, alleging that the retailer had “refused to pay rent” and backed out part way through from a 12-year lease that was meant to end in 2029. The suit seeks more than $4.2 million in unpaid rent and roughly $28 million in damages for the alleged violation of the lease. “By virtue of Victoria’s Secret’s impermissible surrender of the premises, failure to continuously open for business and operate and failure to pay rental as it became due and owing, Westfield terminated the lease effective May 27, 2021,” Westfield wrote in its complaint. “As a result of Victoria Secret’s defaults under the lease and the resulting termination, Westfield is entitled to accelerate all rental as if the lease had not been terminated.” Lease agreements sometimes address these scenarios through what are known as co-tenancy clauses. Such provisions may allow tenants to reduce their rent or leave their premises during their lease term, if they can show other important tenants have already left. Victoria’s Secret allegedly invoked such co-tenancy failures and sought to terminate its lease. But Westfield argues in its suit that the retailer had not shown evidence for its claim about such co-tenancy issues. Read more. https://finance.yahoo.com/news/victoria-secret-hit-landlord-suit-215525…

What does the future hold for the retail industry? Watch the latest episode of ABI's "Industry Viewpoints" featuring Laura Davis Jones of Pachulski Stang Ziehl & Jones (Wilmington, Del.). https://www.youtube.com/watch?v=BSK20W9r2l4&feature=youtu.be

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. https://store.abi.org/retail-and-office-bankruptcy-landlord-tenant-righ…

Investors began backpedaling from AMC Entertainment Holdings Inc. after the movie-theater operator said that it plans to sell more stock — while simultaneously cautioning potential buyers of its shares that they might lose all their money, the Wall Street Journal reported. Shares of AMC finished Thursday’s wild trading session down 18% at $51.34 after almost doubling in value the previous day. The stock appeared set to continue its run in Thursday’s premarket trading, notching double-digit percentage gains. The momentum reversed, though, once the company filed with regulators to sell more than 11 million shares and warned against investing in its stock. AMC shares dropped as much as 40%, then later recovered all of those losses before sliding again. The company’s shares had rocketed in recent days — extending their advance this year by 2,850% before Thursday’s decline — after the company sold a chunk of new shares to the hedge fund Mudrick Capital Management LP. The company had leaned into its sudden popularity with individual investors by offering popcorn to shareholders who visit an AMC cinema this summer. (Subscription required.)

AMC Entertainment Holdings Inc. extended Wednesday’s surge in premarket trading as the Reddit retail-trading army continued to gorge on the stock, sending it to heights that has left Wall Street pros perplexed, Bloomberg News reported. After rising 95% to a record high in the last regular session, AMC gained 13% to $71.01 as of 4:02 a.m. in New York. The money-losing movie-theater chain has a market value of more than $30 billion, making it more valuable than at least half of the companies in the S&P 500 Index. While most financial commentators agree that the stock has detached itself from traditional investment fundamentals, they are less sure of the reason. Some cite an abundance of liquidity and savings created during the pandemic, while others point to the impact of social media in providing a platform for small investors to egg each other on. 

Mudrick Capital sold all its stock in AMC Entertainment Holdings Inc. as of Tuesday, the same day the movie theater chain disclosed that the investment firm had bought $230.5 million of fresh shares to bolster its finances, Bloomberg News reported. Mudrick no longer holds any AMC shares and sold at a profit. The firm disposed of its stake after concluding that AMC’s stock is overvalued, propped up by a recent wave of day-trader enthusiasm. AMC said yesterday that it sold stock to Mudrick with plans to “go on offense” for acquisitions. The agreement with New York-based Mudrick was for 8.5 million shares of common stock at $27.12 apiece. The stock purchase came with the assurance that the shares would be “freely tradable,” meaning the firm could sell the shares at any point or in any amount it chose. Debt holders have also benefited from the recent equity rally. Some of its junk-rated second lien bonds due 2026 that were trading as low as 5 cents on the dollar in November are now close to face value, and quotes on its senior subordinated notes maturing in 2027 jumped about 4.5 cents Tuesday to almost 80 cents.