BCBG to get new lease on life
Bankrupt fashion retailer BCBG Max Azria Group has reached an agreement on a comprehensive restructuring.
It includes the possible sale of nearly all the retailer's assets to Marquee Brands LLC and Global Brands Group Holding Limited. The completion of the transactions with Marquee and Global Brands are expected to immediately follow approval by the United States Bankruptcy Court. The expected closing date is no later than July 31, 2017.
Marquee and Global Brands said they intend to continue to operate a substantial majority of BCBG's core businesses. Marquee will acquire the intellectual property associated with the BCBG brand, while Global Brands will acquire certain of the assets associated with the operation of the BCBG business.
Marquee Brands plans to leverage its brand management platform to grow BCBG and related brands into new product categories, distribution channels and geographies. Global Brands will market, promote, sell and distribute products bearing the BCBG brands, as well as operate the wholesale operations, select retail stores and e-commerce platform of the BCBG brands.
"This is the best possible outcome for customers, vendors, business partners, and our employees who are the lifeblood of the company," said Marty Staff, acting interim CEO of BCBG Max Azria Group. "BCBG will remain a viable, creative and strong brand going forward across multiple platforms."
BCBG, which filed Chapter 11 in March, listed assets in the range of $100 million to $500 million, and liabilities in the range of $500 million to $1 billion. The retailer has already closed 120 stores as part of its restructuring efforts. BCBG currently operates 73 retail stores, and 276 partner shops.
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KFC, Marietta, Georgia
A local landmark, which also happens to be one of KFC’s most iconic locations, has reopened after a $2.2 million renovation.
KFC’s “Big Chicken” restaurant, which features a 56-ft. steel chicken complete with a moving beak and rolling eyes, was constructed in the 1960s and became a local landmark and tourist attraction. It has been updated with a more contemporary aesthetic as part of KFC’s initiative to remodel approximately 70% of its U.S. restaurants to its “American Showman” design as part of the brand’s turnaround strategy.
The new design, which speaks to KFC’s heritage and pays tribute to its founder, features such branded touches as bold and red exterior stripes, lighting fixtures styled to resemble chicken buckets, and touches of Colonel Sanders throughout. Owing to the unique location, nearly every element of the design was customized specifically for the Big Chicken.
“Our goal for this remodel was to uphold and maintain the integrity of the Big Chicken, while preserving it for future generations to enjoy, ” said Mike Kulp, president and CEO, KBP Foods, a KFC franchise and owner of the Big Chicken. KFC and KBP Foods partnered with FRCH Design Worldwide and Wieden+Kennedy to create the design concept for the location.
The restaurant is the first KFC in the United States designed to offer patrons a real-time view into the kitchen. The dining space has been expanded, and enhanced with murals painted by local artists. Two new patios, including a screened-in back porch, have been added. In addition, the space features a retail store that sells one-of-kind merchandise.
“The completion of the Big Chicken marks another major milestone in our KFC U.S. turnaround,” said Kevin Hochman, president and chief concept officer for KFC U.S. “We recently completed our 11th consecutive quarter of same store sales growth and more than 400 restaurants across the country have been remodeled, while hundreds more are currently in the planning and design phase.”
This is a nice news bit. But where is it located?? It would be nice to know.
Apparel giant in store closing move amid sales drop
Ascena Retail Group, operators of such brands as Ann Taylor, Lane Bryant and Dressbarn, is planning to close hundreds of stores. The news came on the heels of a brutal quarter.
The company reported a net loss of $1.031 billion, or $5.29 per diluted share in its third quarter, ended April 29, which included a non-cash, pre-tax impairment charge of $1.3 billion to write down the company’s goodwill and other intangible assets. This compared to net income of $15 million last year, or $0.08 per diluted share, in the year-ago quarter.
Net sales fell to $1.565 billion, down from $1.669 billion in the year-ago period. Total same-store sales fell 8% amid a decline in store traffic across all brands. By banner, same-store sales were down 7% at Ann Taylor; 6% at Loft; 12% at Maurices; 8% at Dressbarn; 11% at Catherines; 6% at Justice; and 6% at Total Kids Fashion.
Ascena currently operates over 4,800 stores throughout the U.S. Canada, and Puerto Rico. On the chain's earnings call, president and CEO David Jaffe said the company will close more than 250 locations by July 2017. An additional 400 stores could close, Jaffe said, if the company can't negotiate reduced rent with landlords.
"Over the next two years, we expect to close or achieve substantial rent reductions in more than 650 stores, which represent almost 25% of the total store population with lease term maturity between 2017 and July of 2019," Jaffe said. "We expect our fleet optimization program will be earning accretive and will deliver working capital benefits."
No particular store brand is being targeted for the store closures.
"The store closings are determined by individual stores, not by the brand," said Brian Lynchs. There is no overarching brand point of view. It's literally the economics of the individual stores.
Jaffe said the chain's third quarter performance reflected an extremely competitive market environment, characterized by persistent store traffic declines and intense commercial activity for the chain's third performance. And he sees no let-up in sight.
"We expect these factors will remain major headwinds for the foreseeable future and reflect an accelerated shift to consumer demand toward ecommerce," Jaffe said. "Responding to the shift requires fundamental changes in retail operating model, and we’ve made significant progress toward transforming our business to compete in this new environment."
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