Lucky Brand files for bankruptcy, has an offer to sell company

Lucky Brand, a Los Angeles-based retailer filed for Chapter 11 bankruptcy protection Friday AP News. According to Lucky Brand, the apparel retailer is blaming its problems partly on the coronavirus pandemic. It said that it will close 13 stores right away and more could be closed during bankruptcy proceedings. Lucky Brand announced that it has reached a deal to sell the company for $14.1 million cash and $51.5million in credit to SPARC Group. SPARC Group is the owner of Aeropostale and Nautica retailers. This deal would preserve most or all of the company’s existing network of stores. Lucky Brand expects to close the sale by mid-August.

Total Retail’s Consideration: As the COVID-19 pandemic continues, more retailers are unfortunately being swept away into a tsunami of bankruptcies. Lucky Brand joins GNC Tuesday Morning, J.C. Stage Stores and Neiman Marcus joined Lucky Brand. Mark Renzi, Chief Restructuring Officer, said Lucky Brand was “undermined” by a shift in shoppers away from brick and mortar stores. This was compounded by temporary store closures because of the virus outbreak this year. Limited liquidity made it difficult to obtain new inventory from vendors. Lucky Brand, like other retailers, had to furlough over 2,500 employees during pandemic to reduce costs. However, this wasn’t enough for a bankruptcy filing.

Lucky Brand and other retailers don’t necessarily have to go under Chapter 11. A Chapter 11 restructuring offers retailers who still have relevance to consumers an chance to reinvent themselves. It will be fascinating to see which companies are able innovate and transform into thriving businesses as we witness these companies go bankrupt.

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Source: https://www.mytotalretail.com/article/lucky-brand-files-for-bankruptcy-has-offer-to-sell-company/

Brooks Brothers has filed for bankruptcy and is looking for a buyer

CNBC reported that Brooks Brothers, a retail brand, filed for Chapter 11 bankruptcy Wednesday. They are currently looking for a buyer. Brooks Brothers, a country’s oldest retailer, was founded in 1818. It is well-known for its prepster clothing and polos. The iconic retailer had been struggling to rent and was forced to sell in 2019 after disruptions from the coronavirus pandemic. CNBC reports that Brooks Brothers attracted interest from potential buyers including Authentic Brands. Many buyers prefer Brooks Brothers to be acquired with fewer stores.

Brooks Brothers currently has over 500 stores around the world and employs 4,025 employees. Brooks Brothers began discussing which of its 250 North American locations it would permanently close. It had already closed 51 stores due to the coronavirus pandemic. CNBC reported that most of the store closings have already started. Brooks Brothers plans to reopen many of the stores it temporarily closed due to the pandemic.

Total Retail’s View: As the coronavirus epidemic continues to affect many industries, more retailers will have to make the difficult decision to file bankruptcy. Brooks Brothers joins Lucky Brand and GNC as Chapter 11 protections during the pandemic. Brooks Brothers is one of America’s oldest clothing companies. It has dressed 40 presidents in the United States over the years. Brooks Brothers is seeking a buyer that shares its core values, culture and ambitions. We hope that the right buyer will be found and respond quickly to our request to save this iconic brand.

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Source: https://www.mytotalretail.com/article/brooks-brothers-filed-for-bankruptcy-and-is-seeking-a-buyer/