Perfumania’s bankruptcy plan gets court approval
Perfumania Holdings received legal approval to move forward with its reorganization strategy.
The nation’s largest discount retailer of perfumes and specialty celebrity and designer fragrances filed for Chapter 11 bankruptcy protection in late August, with a goal of moving its business forward. The retailer filed with a prepackaged plan in hand that outlined the steps needed to revise its business model — a strategy that would rework $200 million in debt, according to Law360.
On Friday, the U.S. Bankruptcy Court for the District of Delaware approved the retailer’s restructuring plan, According to the new strategy, Perfumania will continue to operate as a privately-held company, and the retailer will close underperforming stores.
The company will also continue to pay vendors and suppliers in full, and cancel all outstanding shares of Perfumania common stock. However, shareholders will be given the opportunity to receive consideration of $2 per share in exchange for completing a shareholder release form.
The retailer will receive an equity infusion from certain current shareholders and holders of its unsecured debt. This equity will be used to make distributions, to fund the consideration being paid to shareholders who submit a shareholder release form, and to fund ongoing operations, Perfumania said in a statement.
The reorganization plan is expected to go into effect on Wednesday, Oct. 11, according to the company.
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Bankrupt Gander Mountain acquired
The largest U.S. chain dedicated to recreational vehicles and a group of liquidations have come together to thrown a lifeline of sorts to outdoor retailer Gander Mountain.
Camping World Holdings was chosen as the winning bidder at a bankruptcy auction for certain assets of Gander Mountain and its Overton’s boating business. Under the terms of the deal, Camping World, which is run by Marcus Lemonis, the host of CNBC TV‘s reality show “The Profit,” is obligated to run 17 of Gander Mountain’s 160 stores as a going concern. However, Lemonis told The Wall Street Journal he might keep as many as 70 stores open depending on if he can work out the right deals with landlords.
The Camping World consortium, which includes Gordon Brothers Group LLC and Hilco Merchant Resources LLC, bested a going-concern bid from Gander rival Sportsman’s Warehouse. The group also won all of Gander Mountain’s intellectual property. The value of the winning bid was about $390, according to reports.
“The Gander Mountain and Overton customer and their affinity to the outdoor lifestyle are the perfect complement to our Camping World business,” said Lemonis, who serves as chairman and CEO of Camping World, which operates over 125 locations. “The structure of our deal provides much flexibility and will not only allow us to refine the inventory selection and select only those stores which are profitable or we believe have a clear path to profitability, but will also allow us to immediately offer our comprehensive portfolio of services, protection plans, products and resources to the existing Gander Mountain and Overton customer base and in stores in which we elect to operate.”
Gander Mountain filed for Chapter 11 in March, saying it planned to close underperforming stores and sell itself. As part of its bankruptcy proceedings, 32 of its 160 location s are in the process of being liquidated.
“The liquidation of the existing Gander Mountain inventory will allow us to start with a clean slate of what we consider the appropriate mix and level of inventory, including the addition of Camping World and Overton offerings where appropriate, and our lease designation rights will allow us to select only those stores in appropriate locations with appropriate cost structures,” Lemonis said.
Added Camping World COO Brent Moody: “Camping World’s plan is to immediately right size the inventory and operate only in retail locations with occupancy costs that we believe support profitable operations, with an extreme focus on corporate overhead and expenses, consistent with our other operating segments.”
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Blockbuster restaurant deal
Panera Bread has been acquired by a European firm with a growing U.S. presence.
The fast-casual bakery/café brand has agreed to be acquired by JAB Holding Company, the investment arm of the Reimanns of Germany, for $7.5 billion, including the assumption of about $340 million in debt.
JAB’s U.S. holdings include Krispy Kreme Caribou Coffee, Einstein Noah Restaurant Group Inc., Peet’s Coffee & Tea, and Keurig Green Mountain.
Under the terms of the deal, JAB would pay $315 in cash a share, representing a premium of 30% to Panera’s 30-day volume-weighted average stock price as of March 31.
Good news. Raise the store standards and clean them up. Should be easy to attract new business and retain old. Expect change!