Clothing chain Francesca’s files bankruptcy to sell itself

Clothing and accessories chain Francesca’s Holdings Corp. filed for bankruptcy protection to ease a planned sale of assets to an investor as retailers face continued financial pressure during the coronavirus pandemic.

Francesca’s sought chapter 11 in the U.S. Bankruptcy Court in Wilmington, Del., on Thursday to run a sales process while tapping TerraMar Capital LLC, which invests in midsize businesses, as the lead bidder. TerraMar’s offer will be subject to higher bids and an auction if necessary, and requires court approval to close.

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Francesca’s CEO Andrew Clarke said a number of other interested parties are engaged in due diligence.

Francesca’s storefront (Google Street View) 

“We are confident that we will emerge from this process as a stronger company poised to drive growth by exploring new brand avenues, expanding our e-commerce channels, and providing our customers with the latest fashion options and treasure-hunt experiences they know and love us for, ” he said.

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Houston-based Francesca’s said in November that it would close roughly 140 of its boutiques–which sell apparel, jewelry, accessories and gifts–by the end of January, leaving about 560 in operation. The company said Thursday it planned to renegotiate a number of leases during the bankruptcy process, which “may include closing additional boutiques.”

Francesca’s lender Tiger Finance LLC is supplying a $25 million financing package to carry the company through chapter 11 and cover employee wages and benefits and the provision of customer orders. The company’s planned sales process would conclude by Jan 20.

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The coronavirus has been devastating for many retailers as government mandates and shoppers’ fear of contagion have reduced foot traffic at bricks-and-mortar locations. The pandemic exacerbated the challenges retailers already faced from changing consumer habits and the growing popularity of online shopping.

Retailers shut down stores for good at a record pace in the first half of 2020, while big companies like J.C. Penney Co., Neiman Marcus Group Inc. and Brooks Brothers Inc. filed for chapter 11.

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Men’s Wearhouse Parent Leaves Bankruptcy

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The parent of discount retailer Men’s Wearhouse has emerged from bankruptcy.


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The parent of discount retailer Men’s Wearhouse has emerged from bankruptcy just in time for the holiday shopping season after wiping away $686 million in debt.


Tailored Brands

(ticker: TLRDQ), which also owns Jos A. Bank, Moores Clothing for Men and K&G, sought bankruptcy protection in August, just one of several retail casualties of pandemic-induced business shutdowns this year.

The Houston-based company said it has repositioned itself to boost sales online as well as through stores and has realigned its merchandise for “today’s needs and trends.”

“We are confident we are well-positioned for the future and look forward to building upon this momentum as we enter this next chapter,” said CEO Dinesh Lathi in a statement.

As retailers and mall operators struggle with low in-store foot traffic and sales, many are looking to online sales to take up the slack. According to Adobe Analytics, consumers spent $9 billion online on Black Friday, a 21.6% increase over last year. It was also the second-largest online spending day in U.S. history.

Forced store closures, reduced occupancy, and social distancing guidelines wreaked havoc on retailers this year, forcing many into bankruptcy court, including Neiman Marcus,

J.C. Penney,

Lord & Taylor, and Brooks Brothers.

In July, Tailored Brands said it would cut 20% of its workforce and close 500 locations, citing the “unprecedented and industrywide business disruptions.”

The National Retail Federation has tried to put a positive spin the industry despite this year’s challenges. For every segment, there are more companies opening stores than closing them, it says on its website.

Last month, the NRF said holiday sales are expected to rise between 3.6% and 5.2% compared with last year, showing a “strong finish” to 2020 despite the Covid-19 pandemic.

Tailored Brands’ restructuring plan includes a new $430 million loan and a $365 million exit loan, as well as $75 million in cash raised from a debt facility.

Write to Liz Moyer at [email protected]

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PREIT, owner of Fashion District Philadelphia, files for bankruptcy in restructuring plan

The owner of Fashion District Philadelphia and several other malls throughout the region has filed for bankruptcy as part of a move to restructure its business.

PREIT, short for Pennsylvania Real Estate Investment Trust, had indicated in October that its properties were struggling because of the COVID-19 pandemic. The company made a restructuring proposal to its lenders, hoping to avoid filing for bankruptcy, but ultimately did so after receiving 95% backing for its plan.

The bankruptcy filing announced Sunday ensures that PREIT’s properties can continue to operate without disruption as it finalizes the restructuring.

“We are pleased to be moving forward with strengthening the Company’s balance sheet and positioning it for long-term success through our prepackaged plan. We are grateful for the significant support we have received from a substantial majority of our lenders, which we expect will enable us to complete our financial restructuring on an expedited basis,” said Joseph F. Coradino, CEO of PREIT. “Today’s announcement has no impact on our operations – our employees, tenants, vendors and the communities we serve – and we remain committed to continuing to deliver top-tier experiences and improving our portfolio.”

PREIT owns 21 properties in nine states and has sold off several malls in recent years, including the Phillipsburg Mall in New Jersey and the Palmer Park Mall in Easton, Pennsylvania.

Among the properties PREIT owns in the Philadelphia region are the Cherry Hill Mall and Moorestown Mall in South Jersey and the Willow Grove Park Mall, Plymouth Meeting Mall and the Fashion District, the multiyear renovation of Philadelphia’s former Gallery at Market East that held its grand opening in September 2019.

PREIT reported a net loss of $29 million in the second quarter of this year, following coronavirus shutdowns and decreased shopping among consumers after malls reopened. In September, the company received a stock delisting notice from the New York Stock Exchange after its share price fell below the $1 threshold.

Under the bankruptcy filing, PREIT will list some of its properties as collateral for debt and for the $150 million in new lending it has received.

“With the overwhelming support of our lenders, we look forward to quickly emerging from this process as a financially stronger company with the resources and support to continue creating diverse, multi-use ecosystems throughout our portfolio,” Coradino said.

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2 mall owners with 130 locations across the US are filing for bankruptcy ahead of the holiday shopping season

FILE PHOTO: A J.C. Penney Company Inc. store is pictured at a mall in Langhorne, Pennsylvania, U.S. November 17, 2018.   REUTERS/Suzanne Barlyn
A JCPenny store.
  • Two US mall chains that own a total 130 malls filed for bankruptcy.
  • The locations will remain open for now during financial restructuring.
  • The coronavirus pandemic has been catastrophic for retailers, and malls might not bounce back.
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The owners of a combined 130 malls just filed for bankruptcy, CNN reported.

CBL & Associates, based in Tennessee, and PREIT, based in Pennsylvania, both filed for Chapter 11 bankruptcy on Sunday as the retail world continues to suffer the results of the pandemic and lockdowns. Both mall chains will remain open during financial restructuring.

Malls were already in trouble before the coronavirus pandemic struck, and now they may not bounce back. Department stores like Macy’s, Neiman Marcus, and JC Penney — historically anchor stores that occupy large areas of malls and draw customers in — have struggled to draw in customers in the face of COVID-19 and increased online shopping. Without these tenants, malls can be stuck with huge empty space that is nearly impossible to fill.

Read more: Malls’ survival depends on them getting a better mix of stores and making them more interesting to shoppers, the CEO of one major operator says

Both mall chains had mentioned in the past that they were in danger of closing as retailers including JC Penney and Ascena Retail Group filed for bankruptcy this year, CNN reported. Research firm Green Street Advisors told Business Insider in May that it expects half of mall department stores to close by 2021, leaving “excessive dark mall anchor space.” In August, CBL noted unpaid rent and low foot traffic, along with increasing debt, as factors that could lead to bankruptcy, CNN reported.

“Widespread department store closures will accelerate the demise of many malls,” Green Street Advisors said in a spring report. “Many malls will be faced with multiple anchor vacancies, a tough place to come back from.”

More retailers filed for bankruptcy in the first nine months of 2020 than in all of 2019. CBL and PREIT joined the 35 other retailers and restaurant companies that have filed for bankruptcy and liquidation so far in 2020, likely with more to come. 

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CBL, shopping mall giant, files for bankruptcy

CBL Properties, which counts big retailers including JC Penney and Dick’s Sporting Goods as tenants, has filed Chapter 11 bankruptcy protection, according to a company filing despite making an effort in August with its creditors to stave off bankruptcy.

Ticker Security Last Change Change %
CBL CBL & ASSOCIATES PROP 0.15 -0.00 -1.95%

The Chattanooga, Tenn.-based company filed in the Southern District Court of Texas to allow it to keep operating while it attempts to fix its finances. This comes in large part because of a weakened U.S. economy and consumers increasingly turning to online shopping due to the coronavirus pandemic.

Shares of CBL have been under pressure since the start of the year and have lost nearly 95% of their value, as bankruptcy edged closer for the shopping mall operator.

In the filing, CBL said it estimated its assets between $1 billion and $10 billion, with its estimated liabilities around the same levels.

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Bloomberg was the first to report news of the Chapter 11 filing.

In mid-August, CBL said it entered into a “comprehensive restructuring” that allowed it to get rid of $900 million worth of debt and at least $600 million in additional expenses, according to a company filing.

CBL is one of the largest landlords in the country, owning 108 commercial properties, totaling 68.2 million square feet in 26 states, according to its website. One of its largest renters, J.C. Penney, has already filed for bankruptcy, amid a cash crunch.

In mid-October, J.C. Penney CEO Jill Soltau said the company moved one step closer to exiting the Chapter 11 bankruptcy process ahead of the holiday season.

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The announcement comes as coronavirus-linked bankruptcies rise for corporations. According to data compiled by legal service firm Epiq, 5,529 U.S. businesses — including 747 in September — have sought relief in bankruptcy courts this year, up 33% over 2019 levels.

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Fox Business Lucas Manfredi and Daniella Genovese contributed to this story.

US commercial bankruptcies up 33% amid coronavirus pandemic

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CBL, Shopping Mall Operator, Files for Bankruptcy Protection

Shopping mall operator CBL & Associates Properties  (CBL) – Get Report filed for Chapter 11 bankruptcy protection, becoming the latest mall operator seeking to restructure its operations as the Covid-19 pandemic slams the brick-and-mortar retail sector.

CBL filed for bankruptcy protection with the U.S. bankruptcy court for the Southern District of Texas on Sunday. The Chattanooga, Tenn.-based real estate investment trust listed both estimated assets and liabilities in the range $1 billion to $10 billion.

CBL had announced in August that it had entered into a restructuring agreement with a group of its bondholders to allow it to regroup on its debts and beef up its balance sheet amid the pandemic, which shuttered malls outright for much of the spring and has continued to keep shoppers wary of physically entering closed spaces to shop.

However, CBL and other mall operators have continued to struggle as retailers that prior to the pandemic relied on shoppers flocking to malls to buy clothing, accessories and other goods have themselves shuttered their doors. 

J.C. Penney, one of CBL’s biggest renters, earlier this year filed for Chapter 11 protection. Other well-known brands that have stores in CBL malls include Victoria’s Secret and Bath & Body Works, both owned by L Brands  (LB) – Get Report, as well as Signet Jewelers  (SIG) – Get Report and Foot Locker  (FL) – Get Report.

CBL is structured as a real estate investment trust that invests in shopping centers, primarily in the southeastern and midwestern U.S. Shares of CBL were trading at 12 cents in premarket trading on Monday. The stock has fallen 55% since late March.

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