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Few phenomena can fill the dramatic void KUWTK will leave behind, but dispatches from retail bankruptcy court come close. After an August lull, bankruptcy updates are picking up again.
Who’s in: An off-price legend. Century 21 filed for Chapter 11 bankruptcy and plans to close its 13 stores across New York, New Jersey, Pennsylvania, and Florida. Century 21 said its insurance providers missed payments that would have kept the stores afloat. Relying on a small store footprint didn’t help.
Who’s out: Three mall giants. I’ll try my best to not sound surprised.
- J.Crew exited bankruptcy yesterday with most of its khaki outlets intact. Majority owner Anchorage Capital Group converted some of J.Crew’s $1.65 billion debt to equity and greenlit new loans.
- JCPenney’s awaiting approval for an $800 million acquisition orchestrated by mall owners Simon and Brookfield. No word yet on whether those Amazon distribution center conversion rumors are true.
- Neiman Marcus said it could exit bankruptcy by the end of September. Its way out? A $750 million
crutchfinancing package from investors, to wipe out its debt and access some liquidity.
Never really over
Like influencers describing their skincare routines, this saga will drag on longer than anyone wants it to. Analysts predict several corners of retail still have Chapter 11 paperwork to file heading into the fall, including…
- Restaurants. Flannel season will bring an end to outdoor dining; if a return to indoor meals dovetails with a second wave of COVID-19, eateries of all sizes could lose business and miss rent.
- Apparel retailers. J.Jill, Christopher & Banks, and Destination XL rank high on S&P Global Market Intelligence’s list of brands approaching bankruptcy territory. Like 2020’s bankruptcy veterans, they’re selling apparel that’s fallen out of Zoom fashion and they’re at risk of defaulting on massive debts.
Put it together...and we’re due for a record-breaking total by the holidays. This year’s retail bankruptcies passed last year’s tally in July.
Zoom out: Total commercial bankruptcies slowed down in August, but filings still increased 17% YoY. September is typically a busy month on the bankruptcy circuit, and analysts expect filings to speed up regardless of industry this fall.