DESIGN/CONSTRUCTION

Activewear brand in store expansion mode

BY Marianne Wilson

Fabletics, the athleisure brand co-founded by actress Kate Hudson in 2013, continues to expand in the physical space.

The e-commerce retailer, which opened its first brick-and-mortar outpost in 2015, plans to open 12 stores in 2017, giving it a total of 30 locations throughout the continental United States in just 23 months.

The new stores, opened in close partnership with mall developers, including Simon, Westfield, and Macerich, will average just over 2,200 sq. ft., and open before fall 2017. The first opening will take place in Frisco, Texas in March 2017, followed by Indianapolis, Indiana; Lexington, Kentucky; Schaumburg, Illinois; Boulder, Colorado; and Portland, Oregon in second quarter 2017.

Beginning in July 2017, additional Fabletics stores will open in Scottsdale, Arizona; Cerritos, San Jose, San Francisco and San Diego, California; and Paramus, New Jersey.

“Our inspiration for the store was clear and simple – we aimed to bring a hint of the active lifestyle elements that shape our customers lives inside while keeping the main focus on our amazing product offering and delivering a seamless customer experience. Less is more,” said Dustin Netral, senior VP of operations for Fabletics. “Ultimately, the store was designed to enhance our overall brand experience, inviting customers in to touch, feel and see the high quality fabrications, latest innovations and newest designs, while making it as easy as possible for them to shop the way they like.”

Fabletics stores combine the best of the online and physical worlds, with mobile points of sale, free shipping from warehouses for out-of-stock items, in-store fitting appointments, and a buy-online and pick-up in store service.

In addition, customers can take advantage of a virtual shopping cart to help them complete their shopping online at home and review their in-store purchases on the company’s website. They can also sign up for the company’s VIP membership (subscription) program.

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FINANCE

Acquisition creates first national bedding chain

BY Marianne Wilson

The nation’s two leading mattress specialty firms are one.

On Friday, Mattress Firm completed its $780 million acquisition of rival Sleepy’s. The combined company will have annual sales of over $3.6 billion through approximately 3,500 retail locations in 48 states.

“We are excited about the opportunities our combined company will offer our customers, employees, business partners, vendors and shareholders, as the first truly border-to-border and coast-to-coast, multi-brand mattress specialty retailer,” stated Steve Stagner, Mattress Firm’s CEO.

Effective immediately, Adam Blank, previously Sleepy’s COO and general counsel, will become president of Sleepy's. In his expanded Blank will report directly to Stagner and support the continued growth of Sleepy's, as well as the evaluation and integration of best practices across the combined company.

Houston-based Mattress Firm in the nation’s largest mattress specialty chain, with 2,400 stores. Sleepy’s, based in Hicksville, New York, is the second largest, with 1,050 stores in 17 states, mostly in the Northeast.

Mattress Firm said it expects to generate annual synergies of approximately $40 million by fiscal 2018.

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FINANCE

American Apparel emerges from bankruptcy

BY Marianne Wilson

It’s the beginning of a new era at long-suffering American Apparel.

On Friday, the company announced it has emerged from Chapter 11 as a private company after successfully implementing its reorganization plan. The announcement comes days after the Delaware bankruptcy court gave its approval to the plan.

Under the approved plan, approximately $230 million in bonds was wiped out in exchange for equity in the reorganized company. The participating lenders include Monarch Alternative Capital, Coliseum Capital and Goldman Sachs Asset Management.

In addition, the chain’s new owners provided an infusion into the company of $40 million of exit capital and a commitment for a $40 million asset-backed loan. Annual interest expense will decrease by $20 million annually as compared to the period before the company's Chapter 11 case.

Also under the plan, American Apparel converted its corporate form from a Delaware corporation to a Delaware limited liability company known as American Apparel, LLC.

“With the enormous debt burden removed, we can now turn our full attention to our strategic turnaround, which will benefit our customers, vendors and employees,” said CEO Paula Schneider. “Our strategy will focus on: designing fresh products and merchandising; launching new partnerships to grow the e-commerce platform; unveiling progressive advertising and marketing campaigns; investing in brick-and-mortar retail locations in more promising areas; and implementing rigorous planning and forecasting for timely product deliveries and to streamline excess inventory."

As of February 1, 2016, American Apparel operated 202 retail stores in 19 countries including the United States and Canada. The company also operates a global e-commerce site and a wholesale business.

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