L Brands pursuing “all” options for La Senza
L Brands’ La Senza intimate apparel brand is on the block.
The company said it is pursuing “all alternatives” for its La Senza brand as it looks to focus on its larger core businesses. La Senza, which was founded in Canada and purchased by L Brands in 2006, operates 126 company-owned stores in North America, and 188 non-company-owned international stores. L Brands estimates that La Senza’s 2018 revenues and operating loss will be approximately $250 million and $40 million, respectively.
L Brands disclosed plans for La Senza in a statement that reported the company’s September sales figures. Net sales rose 8% to $1.058 billion for the five weeks ended Oct. 6, 2018. Same-store sales rose 5%.
L Brands, through Victoria’s Secret, Pink, Bath & Body Works, La Senza and Henri Bendel, operates 3,103 company-owned specialty stores in the United States, Canada, the United Kingdom and Greater China.
Sears’ lenders reportedly pushing for liquidation
Sears Holdings Corp.’s future is looking grimmer with each passing day.
A group of the cash-strapped chain’s lenders, including Bank of America Corp., Wells Fargo & Co. and Citigroup Inc., are urging the company to liquidate under a Chapter 7 bankruptcy filing rather than reorganize under a Chapter 11 filing, according to a report by the Wall Street Journal. Sears has a $134 million debt payment due on Oct. 15, which the company retailer previously warned it may not meet.
According to reports, Sears CEO and chairman Eddie Lampert, who has helped keep the company float by lending it more than $1 billion over the past several years, does not play to pay the $134 million on Monday.
In comments, analyst Neil Saunders, managing director of GlobalData Retail, suggested that Sears may be past the point of restructuring.
“The latest financials show that group liabilities outweigh assets by some $4.4 billion,” he said. “Not only has this imbalance been pre-sent for many years, but it has progressively worsened over time. A restructuring involving further asset sales would do little to fill this hole.”
For more, click here.
Analysis: Sears is broken operationally and financially
The news that some lenders have urged Sears to file for Chapter 7 bankruptcy, which involves the liquidation rather than the restructuring of the business, confirms our view that Sears is a firm without any real inherent value.
The latest financials show that group liabilities outweigh assets by some $4.4 billion. Not only has this imbalance been present for many years, but it has progressively worsened over time. A restructuring involving further asset sales would do little to fill this hole. Certainly, the process may allow Sears to pay down some debt and reduce liabilities, but it would also further weaken the asset base of the company. Ultimately, this puts Sears in a dangerous catch 22 situation from which there is no real escape.
If the company was profitable at the operating level there may be some hope that after restructuring it could rebuild its assets and pay down further debt. However, this is not the case. The latest numbers show that in the half year to August, the company made a huge operating loss of $419 million. In our view, this is a company that is bro-ken operationally as well as financially.
All of this is underscored by the continued erosion of the brand image of both Sears and Kmart, which have suffered from years of underinvestment. From our data, this is still causing a severe erosion of customer numbers and the amount existing customers spend when they shop. A substantial investment would be required to reverse this position – something Sears is just not in a position to undertake.
The prognosis is gloomy, just as it has been for many years. Over this time Sears has been expert in restructuring and playing for time with various financial machinations. However, at some point, the music has to stop. We believe that time is now.