NRF: Retail jobs on the increase in April
The retail industry had some good news on the job front in April.
Retail industry employment increased by 2,500 jobs in April from March, the National Retail Federation said Friday. (The numbers exclude automobile dealers, gasoline stations and restaurants.) The NRF report, which does not detail job cuts, comes the day after a report from outplacement consultancy Challenger, Gray & Christmas that said retail industry experienced 11,669 job cuts in April, the highest total among all industries.
“This rebound in April employment mitigates the weakness in recent months,” NRF chief economist Jack Kleinhenz said. “It’s important to remember that job growth and other key economic indicators for any single month or short period can be highly variable. A month or two up or down might be the opposite of the months before or after. It’s long-term trends that tell us the most.”
Average hourly earnings remained strong, up a solid 2.5% higher than the same time a year ago. On a three-month moving average on a seasonally adjusted basis, retail employment shows a decline of 20,600 jobs.
“We will be watching the mid-month retail sales numbers to understand how recent employment shifts relate to consumer spending,” Kleinhenz said.
According to the Bureau of Labor Statistics data, the retail industry currently has over 541,000 job openings, more than twice as many as it did during the recession.
The overall economy gained 211,000 jobs in April, the Labor Department said. April unemployment fell to 4.4%, down slightly from 4.5% in March.
Merger talks between luxury department store companies hit a snag
Is Neiman Marcus about to be involved in a lawsuit as opposed to a merger?
Merger discussions between Neiman Marcus and Saks Fifth Avenue have hit a roadblock as Neiman Marcus faces a possible lawsuit from its term loan lenders and bondholders, reported The New York Post. The lawsuit involves Neiman Marcus’ decision to move three of its stores into a subsidiary that protects them from creditors in the event of a bankruptcy, according to the report. The stores in question are located in San Antonio and Longview, Texas, and McLean, Virginia.
“Neiman Marcus made moves that they thought were legal, but the lenders could seek a court ruling finding that Neiman breached its contract,” said Jude Gorman, general counsel at Reorg Research, which focuses on distressed debt, in the Post report.
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Report: Children’s clothing retailer to reorganize
Gymboree Corp. is planning a significant reduction in its store fleet.
The retailer is looking to close hundreds of stores part of a restructuring under bankruptcy court protection, The Wall Street Journal reported. The final number of stores, however, has yet to be determined.
Citing unnamed sources, the report said Gymboree was likely to file for Chapter 11 bankruptcy protection in the coming week. The retailer is struggling with declining sales, and reported a 5% decrease in same-store sales for its most recent (second) quarter. It has posted losses for the last several years amid increased competition from online and discounters.
Gymboree also has a heavy debt load resulting from Bain Capital’s leveraged buyout of the company back in 2010. According to the report, Gymboree has a $1.04 billion debt that will mature in 12 to 22 months, of which $871.9 million is due in under a year. In March, the company warned it was short on cash and stated it was in talks with lenders to refinance at least a portion of its debt to sustain liquidity.
As of January 28, 2017, Gymboree operated a total of 1,291 retail stores, with 586 namesake stores (536 in the United States, 49 in Canada and one in Puerto Rico), 174 Gymboree Outlet stores (173 in the United States and 1 in Puerto Rico), 149 Janie and Jack shops (148 in the United States and 1 in Puerto Rico), and 382 Crazy stores in the United States.