Borders files for Chapter 11
New York City — Borders Group filed for Chapter 11 bankruptcy on Wednesday. The troubled bookseller plans to close 30%, or about 200, of its most underperforming stores during the next few weeks. The long-expected filing will allow Borders to access new capital and reorganize its operations, Borders Group president Mike Edwards said in a statement.
"It has become increasingly clear that in light of the environment of curtailed customer spending, our ongoing discussions with publishers and other vendor related parties, and the company’s lack of liquidity, Borders Group does not have the capital resources it needs to be a viable competitor," he said.
The chain has appointed Ken Hiltz, the managing partner of Southfield-based turnaround firm AlixPartners, as Borders Group senior VP — restructuring of the company.
Borders listed $1.27 billion in assets and $1.29 billion in liabilities in its Chapter 11 filing, which was done in the U.S. Bankruptcy Court, Southern District of New York. It has fewer than 50 creditors, mostly publishers. The top creditor is Penguin Putnam, which is owed $41.1 million.
Borders recently announced it had received a commitment for $505 million in "debtor-in-possession financing" from GE Capital’s Restructuring Finance division.
“We are confident that with the protection afforded under Chapter 11 and with the support of employees, publishers, suppliers and creditors and the reading public, a successful reorganization can be achieved enabling Borders to emerge from the process as a stronger and more vibrant book seller,” said Edwards.
Safeway launches ‘at-the-shelf’ SimpleNutrition program
PLEASANTON, Calif. — Safeway has introduced its new SimpleNutrition program, an in-store shelf tag system that makes it easier for shoppers to find better nutrition choices among foods and beverages. The SimpleNutrition green shelf tags on qualifying items are located throughout the store next to Safeway’s everyday low prices and club card specials.
Safeway created SimpleNutrition as a first step in helping its customers modify the selection of products that support a healthier lifestyle, the grocer stated. SimpleNutrition makes it easy to find nutritionally better items in store with green shelf tags that highlight up to two of 22 different nutrition and ingredient benefits, such as “gluten free,” “organic,” “sodium smart” or “made with whole grains.”
“Consumers are inundated with conflicting nutrition information and are often skeptical of the nutrition claims on packaging,” stated Barbara Walker, group VP consumer communications and brand marketing for Safeway. “SimpleNutrition is an ‘at-the-shelf’ program that simplifies and personalizes the grocery shopping experience so that shoppers can feel confident about making more informed food choices. … It provides shoppers with a quick snapshot of the nutrition and ingredient benefits that best match their nutritional needs.”
Safeway also will be implementing an at-home nutrition solution — at Safeway.com/SimpleNutrition — as a resource for food, nutrition and health information while moms make their shopping lists.
Safeway will continue to update the qualifying items based on changes in product nutrition and ingredient information and new products in the store. The company also is committed to expanding the SimpleNutrition program throughout 2011 by launching a personalized online nutrition tool to help shoppers find healthier alternatives to the foods they currently purchase.
Abercrombie Q4 earnings nearly double
New Albany, Ohio — Abercrombie & Fitch Co.’s fiscal fourth-quarter net income nearly doubled on strong sales overseas and better U.S. results. The retailer reported net income of $92.6 million, up from $47.5 million a year ago.
Revenue for the period ended Jan. 29 rose 23% to $1.15 billion, from $936 million. Domestic revenue rose 13%, while international revenue jumped 61%.
Same-store sales rose 13%.
"We finished the year with strong domestic sales growth and continued to see very strong results in Europe," CEO and chairman Mike Jeffries said in a statement.
Same-store sales at Abercrombie & Fitch rose 13%, while Abercrombie kids stores had a 9% increase. Hollister Co.’s same-store sales also gained 13%.
Abercrombie said that its full-year earnings surged to $150.3 million in the prior year.
Annual revenue increased 18% to $3.47 billion from $2.93 billion, while same-store sales rose 7%.
The retailer continues to push forward with its overseas expansion. It plans to open Abercrombie & Fitch flagship stores in Paris; Madrid; Dusseldorf, Germany; Brussels; Dublin; and Singapore in fiscal 2011. It also expects to open 30 to 40 Hollister stores in overseas malls.
The company anticipates a "minimal number" of stores opening in the United States, with about 50 domestic locations likely to close during the fiscal year.