Retailers that have filed for bankruptcy during the pandemic are encountering a challenging Chapter 11 scenario, during which they’ve sought rent deferrals or concessions while their stores were closed.
Since then, a number of retailers that have sought to survive the process have also brought a fervor toward reopening stores, even as the pandemic continues and cases of COVID-19 spike in states including Texas, California, Arizona and Florida.
J.C. Penney Co. Inc. has reopened some 831 stores, the company’s attorney said at a hearing Wednesday before the Texas bankruptcy court overseeing the case. As of early July, J. Crew Group Inc. is projecting to have opened some 480 stores, which accounts for most of its store fleet. Neiman Marcus Group, which has 67 stores around the country, including two Bergdorf Goodman stores as well as Last Call units that sell discounted and clearance items, has reopened most of its stores to varying extents, according to a representative.
“Currently, over 90 percent of the store fleet is open to some degree — either curbside pickup, private appointment, or full shopping, or some combination of those,” a Neiman’s representative said in a statement Wednesday.
“All of our stores are scheduled to reopen in the coming weeks as local and state mandates allow, and as we feel it is safe to do so,” the representative said.
But with so many companies working their way through bankruptcy, it’s hard to keep track of where they each are in the process. So, here, WWD provides a list of where the main retailers and clothing companies undergoing restructuring stand.
J.C. Penney: The retailer filed for Chapter 11 on May 15 in Texas bankruptcy court, seeking to restructure. In June, it got the court’s approval for a $900 million debtor-in-possession package, which the retailer’s advisers have said includes $450 million in new money.
The retailer has projected a goal of having a Chapter 11 plan or a sale confirmed within 160 days, or roughly a little over five months, from when it filed for bankruptcy. The company is also heading toward a July 15 deadline to have a business plan approved by its lenders. Generally, retailers are more likely to be able to get some flexibility on bankruptcy milestones if they can show their stores are performing above their earlier projections.
J.C. Penney has received an extension until July 13 to pay rent, and a hearing in the case is tentatively scheduled for the same day.
Neiman Marcus: The retailer filed for Chapter 11 on May 7, also in Texas bankruptcy court. Neiman’s has received approval for its $675 million DIP package, and there is an ongoing inquiry by the unsecured creditors committee in the case into its Mytheresa transfer. The creditors’ committee is still seeking ways to ensure that the retailer’s bankruptcy plan provides avenues for creditors to seek recoveries related to the Mytheresa transfer. That issue, among others, is expected to be discussed at a hearing scheduled for July 17.
The retailer’s schedule in bankruptcy court envisions having a reorganization plan confirmed by early September.
J. Crew: The retailer filed for Chapter 11 on May 4 in Virginia federal court. So far, it has had its $400 million DIP financing package and disclosure statement approved, and aims to have a confirmation plan approved by Sept. 1. The retailer has spent a portion of its DIP so far, and, under the terms of the financing, whatever remains of the amount when the plan is confirmed would convert into exit financing that would support the restructured company.
J. Crew received an extension until July 6 to make rent payments for June and July.
Centric Brands: The company, which makes products for brands including Calvin Klein, Under Armour and Tommy Hilfiger, filed for Chapter 11 in New York federal court on May 18. It went into the process with $435 million in DIP financing from lenders including Blackstone, Ares Management and HPS Investment Partners, which plan to take control of the business through a restructuring support agreement.
True Religion: The denim apparel brand filed for bankruptcy in Delaware on April 13, and was one of the earliest during this pandemic to ask the court for rent deferrals during the bankruptcy. In June, the company filed a Chapter 11 plan to restructure by converting a portion of its $110.5 million pre-petition debt.
John Varvatos: The men’s wear designer brand filed for bankruptcy on May 6 in Delaware, and obtained final approval in June for its post-petition financing. The company had entered the proceedings with an agreement with one of its lenders, an affiliate of Lion Capital LLP, to sell itself to Lion as a going concern.
J. Hilburn: The men’s wear company filed for Chapter 11 on April 30 in Texas Northern District bankruptcy court. The company quickly embarked on exiting the bankruptcy, and had its Chapter 11 plan confirmed on Wednesday.
Stage Stores Inc.: The retailer filed for Chapter 11 on May 10 in Texas Southern District Bankruptcy court, with plans to liquidate stores.
AllSaints: The clothing brand is in the process of restructuring its U.K. retail operation, through the Company Voluntary Agreement process in the U.K.
Victoria’s Secret U.K.: L Brands Inc., the parent company of Victoria’s Secret, filed for credit protection in the U.K. last month, using a process similar to Chapter 11 in the U.S. to shield the business there from creditors while it explores financing options.
John Barrett Salon: The high-end hair salon run by hairstylist John Barrett filed for bankruptcy in New York in May.
Sabon: Soap company Sabon filed for bankruptcy in New York In May with plans to restructure its business.
Denim of Virtue: The Los Angeles-based small denim brand filed for liquidation in June and is shutting down.