Retailers face large debt, low patronage and potential bankruptcy



The tide has turned since last year! Slowly, the global pandemic is coming to an end. In its wake, the retail industry has changed forever with innovations and technological advancements including online ordering and delivery / pickup, warehousing, automation and mobile self-service. While most landlords and tenants have worked together through adversity, there are still a number of problem tenants who may not be able to recover or who can now use the bankruptcy process to get rid of their property. debts and restructure.

Below are our top 10 retailers to watch for possible Chapter 11 filings in the coming year.

  1. AMC – Why go to the movies when you can stream? According to Motley fool, despite the injection of more than $ 917 million in liquidity from investors at the start of the year, obstacles remain numerous for the film company. The rise in streaming services, the slow return of consumers to movie theaters, as well as a significant portion of their current non-convertible debt are all signs that there is a high likelihood of filing for bankruptcy to restructure debt. .

  2. Nine West – Footwear Company Entering chapter 22? The women’s shoe company owned by Premier Brands Group Holdings already filed for bankruptcy in 2018. At the time, it reduced its debt and sold the Anne Klein brand. However according to Business intern, the pandemic is causing a significant drop in income. The company appears ready for a Chapter 22 filing – a second Chapter 11 bankruptcy a few years after the first filing.

  3. LA Fitness – A reduced footprint? The Wall Street Journal reports that although gyms are now reopened, the pandemic has shaken the fitness industry. However, of all the gyms suffering from the pandemic, LA Fitness appears to be in the best position to use the bankruptcy process to reduce its footprint and renegotiate leases.

  4. Jo-Ann Stores – Private Equity Debt. According to USA today, the private equity firm has significant debt. This scenario is a classic reason for filing for bankruptcy – remember Toys R ‘Us.

  5. Regal Entertainment Group – Large rent arrears. CNBC reports that Regal’s reopening of around 500 locations on April 2 at limited capacity was a big decision for the movie chain. However, like AMC, its owner, Cineworld Group PLC faces significant debt, streaming services and slow customer returns. In addition, many outlets report large rent arrears to landlords.

  6. Barnes and Noble – Can he survive? The acquisition of Paper Source was aimed at creating synergies between the two. However, the business relies heavily on food concessions as well as in-store customers. Have buyers’ habits changed for good as a result of the pandemic? Forbes still has it on her list of specialty retailers to watch for a Chapter 11 filing.

  7. Rite Aid – Healthier people hurt businesses. com notes that the US drugstore chain with 2,500 stores in 19 states had a rough time during the pandemic as fewer people contracted colds or coughs while taking refuge in their homes. According to Moody’s, the company is in danger of default because it has $ 1.5 billion of high risk debt outstanding.

  8. Equinox – Another Gym Ranking? According to Crain’s New York, the owners are suing the private health club for more than $ 6 million in rent back. Bloomberg noted in February 2021 that the company had entered into an agreement that released it from a limited guarantee of SoulCycle’s $ 265 million credit facility with lender HPS Investment Partners. Still, the high rear rent, multiple locations, and other debt issues make the gym an ideal candidate for a Chapter 11 restructuring.

  9. The place of children – The losses continue to pile up. According to Forbes, the pandemic has accelerated clothing depots. One of the top retailers for this year is The Children’s Place. The world’s largest children’s clothing retailer is on track to close more than 300 stores. Although the company negotiated around $ 13 million in rent cuts in the fourth quarter of 2020 for the COVID shutdown period, that might not be enough to avoid a deposit.

  10. The hole – Going bankrupt ? S. News & World Report’s notes that the company’s long-term debt fell from $ 1.24 billion to $ 2.21 billion in 2000 due to the pandemic. Although its activity is expected to recover with the reopening of shopping centers and the return of buyers, the long-term decline in shopping center traffic remains a concern.

COPYRIGHT © 2021, STARK & STARKRevue nationale de droit, volume XI, number 190


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