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Wayne, NJ-based Toys “R” Us filed a voluntary petition for Chapter 11 bankruptcy protection in the Eastern District of Virginia (Richmond) on Monday (Case no. 17-34665). Toys “R” Us operates more than 1,600 locations for both Toy “R” Us and Babies “R” Us and employs approximately 64,000 people. The chain is seeking borrow money in order to pay suppliers by restructuring $5 billion in long-term debt. The company noted that the approaching holiday shopping season accounts for 40% of its net sales.

Prior to the filing, almost all the company’s vendors sought cash in advance before shipping products, forcing Toys “R” Us to raise $1 billion for suppliers. The company’s debt is attributed to a $6.6 billion buyout in 2005 led by KKR & Co. LP, Bain Capital LP and Vornado Realty Trust.

Continue Reading Toys “R” Us Files For Chapter 11 Bankruptcy Protection

Thirty six years ago today, MTV was launched. The song by the The Buggles “Video Killed the Radio Star” was the first video played. Non-video, radio artists, like Christopher Cross (remember “Sailing?”), suffered, by not being ready for TV. Yet, how many people today actually think about a singer’s video and not their song? Heck, when was the last time you saw a video on MTV?

Just like MTV didn’t really kill all the radio stars, Amazon, demographic changes, and consumer tastes are not killing all the shopping centers and malls. Rather, these developments are changing the way we use and see the shopping center and mall experience.

True, there are a number of so-called “dead” centers. At one time, these were popular (just like Christopher Cross), anchored by Sears, JCPenney, or some other big box store that drew traffic. The structure, zoning, and high traffic areas with good visibility to the community still exist. There is just no draw… no “MTV” … to bring people in. This presents opportunities for developers to resurrect “dead” centers.

Continue Reading Amazon Isn’t Killing All the Shopping Centers, Just Like Video Didn’t Kill All the Radio Stars

Rue21 Inc. (“Rue21”) filed for Chapter 11 bankruptcy protection in Pittsburgh, PA on Monday (case no. 17-22045-GLT, Western District of Pennsylvania).

This was another bankruptcy filing I saw coming back in January, when I wrote my blog Retailers to Watch for Possible Bankruptcy Filings in 2017. In the bankruptcy petition, the teen fashion retail chain lists more than 1,100 stores in the U.S. and assets and liabilities in the range of $1 billion and $10 billion.

Continue Reading Rue21 Files for Chapter 11 Bankruptcy

Kansas-based Payless, Inc. filed for Chapter 11 bankruptcy protection in the Eastern District of Missouri (St. Louis) on Tuesday afternoon, under docket # 17-42257.

If you read my blog post about Payless from two weeks ago, this filing should come as no surprise to you. I even put Payless on my retail bankruptcy watch list for 2017 back in January.

The retail discount shoe chain has more than 4,000 stores in 30 countries. CNN reports 400 stores are closing immediately. The company has about $665 million in debt, according to Reuters. In February, Moody’s downgraded the company debt rating, stating the company shown “weaker than anticipated operating performance.”

Continue Reading The Shoe Dropped…Payless Files for Chapter 11 Bankruptcy

As i mentioned in my blog from January, “11 Retailers to Watch for Possible Bankruptcy Filings in 2017,” it looks like Payless is on the verge of a bankruptcy filing.

Bloomberg reports that Kansas-based Payless, Inc. may be filing for bankruptcy protection as early as next week. The retail discount shoe chain has more than 4,000 stores in 30 countries. Speculation is that they will close about 10 to 15% of the stores as it reorganizes.

Continue Reading Payless Expected to File for Bankruptcy in Next Few Weeks

Last month I posted a blog indicating that Gander Mountain was possibly preparing for Chapter 11 bankruptcy. The rumors were true.

St. Paul-based hunting and fishing chain, Gander Mountain Company, which bills itself as “America’s Forearms Supercenter,” filed for Chapter 11 bankruptcy protection on Friday in the U.S. Bankruptcy Court for the District of Minnesota, docket # 17-30673 and 17-30675. Gander Mountain is the nation’s largest retail network of outdoor specialty stores for shooting sports, hunting, fishing, camping, marine, apparel, footwear, and outdoor lifestyle.

Continue Reading Gander Mountain Files for Chapter 11 Bankruptcy – Fifth Outdoor Retailer to File in Last Year

The new owner of the RadioShack brand, General Wireless Operations Inc., just filed for Chapter 11 in the United States Bankruptcy Court for the District of Delaware. This is the second Chapter 11 filing for the brand in two (2) years (a chapter 22 filing, like the recent EMS brand filing).

Continue Reading Déjà Vu – RadioShack Brand files for Chapter 22 Bankruptcy

The 61-year old Indianapolis-based appliance and electronics chain, HH Gregg, filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of Indiana. The company has struggled with declining sales for about four years. According to Reuters, HH Greg has a signed a term sheet with an unnamed party to purchase its assets, and it is expected to emerge from the bankruptcy process in approximately 60 days. Of its more than 220 stores, the company plans to operate about 130 normally throughout the restructuring process. It said last week it would shut 88 stores.

Continue Reading HH Gregg Files for Chapter 11 Bankruptcy: Part of a Next Wave of Retailers Seeking to Restructure/Reduce Debt and Reduce Footprint

Reuters reports that Sports Direct International Plc, Britain’s largest sporting goods company with about 700 stores throughout Europe, is discussing a bid for Eastern Outfitters LLC (“Eastern Outfitters”), the parent of Bob’s Stores and Eastern Mountain Sports (“EMS”).

Versa Capital Management LLC (“Versa”) is the owner of Eastern Outfitters. Last April, Vestis Retail Group LLC, the former holding company for Bob’s, EMS, and Sports Chalet, filed for Chapter 11 bankruptcy protection. Versa acquired Bob’s and EMS through the bankruptcy.

Continue Reading Possible Chapter 22 for EMS Brand – Sports Direct Eying EMS After Poor Holiday Sales