Restaurant franchisee NPC International Inc. won court approval to sell more than 1,300 Pizza Hut and Wendy’s restaurants for about $800 million, six months after the coronavirus pandemic pushed the company into bankruptcy, Bloomberg News reported. Under two deals approved yesterday by U.S. Bankruptcy Judge David Jones, Flynn Restaurant Group will take over 951 Pizza Hut locations and nearly 200 Wendy’s stores, according to court filings. Wendy’s Co. will take over another 200 of its namesake restaurants and then turn them over to a group of its franchisees. The agreements won the support of Pizza Hut and Wendy’s, which were involved in negotiating terms of the sales, attorneys for the two restaurant companies said in court. When NPC filed for bankruptcy last year, it operated more than 1,200 Pizza Hut locations and nearly 400 Wendy’s restaurants. In November, NPC called off auctions for its Pizza Hut and Wendy’s restaurants because the offers were too low, an NPC lawyer said last month. Instead, the company entered into settlement talks that ultimately led to the current deal.
Despite the coronavirus restricting gym capacity while shuttering some entirely, the traditional January spike in memberships has matched — and in some ways exceeded — those of years past, Bloomberg News reported. Part of that can be tied to the predictable explosion of online classes, and a move toward maintaining mental as well as physical health. “It’s not about bikini body goals, because who knows when we’re going to go on vacation again,” said Josh McCarter, chief executive officer of the fitness booking platform MindBody. “Covid-19 has pushed people to think about health more holistically.” The online shift is contributing to what experts said will be a permanent change to how the $32 billion industry works. While 75% of consumers surveyed said they will eventually return to pre-pandemic routines and the actual gym, many indicated they will retain a virtual component — a phenomenon with broad implications for the sector. COVID-19 has accelerated adoption of a hybrid model of online/in-person workouts that more brick-and-mortar gyms are likely to retain when the pandemic recedes. Fitness club-owners grappling with declining memberships have quickly caught on, with 72% now offering on-demand and livestream group workouts, up from 25% in 2019, according to fitness research firm ClubIntel.
Barneys New York is finally returning to its hometown after the pandemic delayed its post-bankruptcy revival plans. The retailer, which for decades was a mainstay of the city’s retail scene, opens Friday inside Saks Fifth Avenue’s Manhattan flagship under the name Barneys at Saks, Bloomberg News reported. It follows an 11-month absence from the city. At 54,000 square feet, the Barneys store-within-a-store is about a fifth the size of its old location that was located several blocks to the north. That store closed in early 2020 after the retailer went bankrupt for the second time. Executives had hoped to inaugurate the project last September, but the pandemic created delays. Merchandise will constantly change and feature selections by both emerging and established designers. Authentic Brands Group, which bought the brand and licensed it to Saks in North America, will open its first standalone Barneys at Saks location in Greenwich, Connecticut, on January 25. The 14,000-square-foot store will offer both men’s and women’s goods.
Consumer spending fell for the third consecutive month in December, confirming what many economists had predicted would be a disappointing holiday season for many retailers and restaurants, the New York Times reported. Retail sales fell 0.7 percent last month, the Commerce Department said on Friday, as the economic recovery showed signs of stalling and virus cases surged across the country, prompting shoppers to avoid stores amid a new wave of restrictions. For the second straight month, the drop was worse than what most economists had predicted, showing that the deterioration of the broader economy in the final quarter of 2020 was deeper than expected. The drop was widespread across many categories, including electronics, autos, and food and beverage stores, which had been areas of strong spending last spring and summer but declined toward the end of the year. Spending at restaurants in December was down again amid a rise in new cases and closures. The decline most likely also reflects how retailers’ strategies of offering holiday deals early in the fall spread out the holiday shopping season across months, and may have dampened sales closer to Christmas. The Commerce Department also revised its November sales data, showing a decline of 1.4 percent, larger than the 1.1 percent drop it had previously reported.
Women’s apparel retailer Christopher & Banks Corp. has filed for bankruptcy while taking steps to close all of the company’s roughly 450 stores, the latest U.S. retailer planning to shut down for good over debt issues and pandemic disruptions, Wall Street Journal reported. The Plymouth, Minn.-based specialty retailer filed for chapter 11 protection Thursday in the U.S. Bankruptcy Court in Camden, N.J., with the intention of holding going-out-of-business sales at store locations and finding a buyer for the company’s e-commerce business. The company is the latest victim “of the retail apocalypse that was first created by a customer migration away from brick-and-mortar stores and most recently, the COVID-19 pandemic,” according to a sworn declaration filed by President and Chief Executive Keri Jones. The company depended heavily on in-store traffic, which has declined in recent years due to competition from big-box retailers, rising online sales and changing consumer preferences, Ms. Jones said in court papers. As a result, Christopher & Banks has already determined that a sale of its traditional brick-and-mortar business is not achievable. The company said it reached out to about 180 potential investors and buyers but found no takers for all or some of its stores, Ms. Jones said. However, the e-commerce business is an attractive asset for buyers, she said. The retailer, which sells privately branded women’s apparel and accessories, was founded in 1956 as Braun’s Fashions in Minneapolis and was later rebranded as Christopher & Banks in 2000. The company now operates 449 locations in 44 states, including 314 Christopher & Banks’s Missy, Petite, Women stores, 76 outlet locations, 31 Christopher & Banks stores, and 28 stores selling women’s plus sizes, C.J. Banks.
Studio Movie Grill has filed its plan of reorganization, nearly three months after filing for chapter 11 protection in October due to effects of the Covid-19 pandemic, the Dallas Business Journal reported. If the bankruptcy court confirms the plan, the company will exit bankruptcy in less than five months, said Frank Wright, Studio Movie Grill's bankruptcy lawyer. While it is waiting on the court to set a date to confirm the plan, the Dallas-based dine-in movie theater chain is also running a sale process to see if an outside bidder is interested in acquiring the company, Studio Movie Grill said on Monday. The plan will provide for a creditors’ trust to manage liquidation of some assets to handle the company’s $50 million of contingent and non-contingent general unsecured debt. The bankruptcy process has forced eventual closure of about one-third of the company’s locations.
U.S. commercial landlords have granted billions of dollars of rent relief to struggling storefronts as property owners strive to keep falling occupancy rates from triggering more severe financial consequences, WSJ Pro Bankruptcy reported. With many commercial property tenants in dire financial straits due to the economic fallout from the coronavirus pandemic, landlords are reluctantly granting concessions on lease payments, lengthening payment terms, extending or shortening leases, lowering rents permanently and even forgiving past-due payments, according to real-estate advisers, property managers and lawyers. By providing the breaks following negotiations, landlords are hoping to avoid pandemic-induced tenant departures, keep properties occupied and rent payments flowing, while avoiding the larger losses that can come from evictions and increased vacancies in their shopping centers and malls. They are fearful of triggering lease provisions that kick in when key anchor retailers or a certain number of tenants leave a certain property, cutting rents for those that remain. Retail vacancies have been steadily on the rise and are expected to significantly increase. The average retail vacancy rate was around 4.5% going into the pandemic and estimated to end 2020 at 5.3% to 5.5% but is projected to increase to between 5.8% and 6.2% by the end of 2021, according to data from real-estate analytics company CoStar Group Inc. Before the pandemic, average retail rents were growing at more than 2% annually, according to CoStar. CoStar now expects rents to decline by anywhere from 1% to 3% year-over-year in 2021. A record-breaking number of major retailers — more than 60 — filed for bankruptcy in the U.S. in 2020. Major retailers announced plans to close more than 12,200 stores last year, according to CoStar. These closures will empty an estimated total of 159 million square feet of retail space, out of roughly 11 billion square feet available nationally, CoStar said. “What’s happening in the market is most definitely going to cause an overall devaluation of real estate across the country,” said Matthew Bordwin, principal and managing director at real-estate brokerage Keen-Summit Capital Partners LLC. Katharine Battaia Clark, a Dallas-based partner at law firm Thompson Coburn LLP, said on a panel during ABI's Winter Leadership Conference last month that she has seen “really aggressive negotiating tactics” being used by consultants hired on behalf of bankrupt tenants. The tenants’ position has been to “accept our terms or take a hike, we’ll reject your lease and then you’ll be an unsecured creditor and good luck to you, and you’ll have an empty space,” she said. Read more.
Midwestern farm, home and outdoor retailer Stock+Field has filed for bankruptcy and plans to close all of its stores by March after 65 years in business, WSJ Pro Bankruptcy reported. Tea Olive I LLC, which does business as Stock+Field, filed for chapter 11 protection on Sunday in the U.S. Bankruptcy Court in St. Paul, Minn. after starting a store closing sale process that is projected to conclude at the end of March. “There have been many challenges in 2020, and Stock+Field was not immune to them,” Matthew F. Whebbe, the company’s chief executive and chairman, said in a post on the retailer’s website. Stock+Field, formerly known as Big R, has 25 stores across Illinois, Indiana, Ohio, Michigan and Wisconsin, as well as two warehouses in Illinois. The retailer changed its name from Big R to Stock+Field in July 2019. “We hope to reopen stores at some point in the future,” Mr. Whebbe said in the post. In court papers, the Eagan, Minn.-based company valued its assets and total debt between $50 million to $100 million. The company said it owes about $29.7 million to asset-based lender Second Avenue Capital Partners LLC and other creditors. The retailer is requesting to use cash collateral pledged to lenders to continue operations and store closing sales to maximize asset values, according to court documents filed yesterday.
