Sears Canada is going out of business
It’s closing time for Sears Canada.
The long-struggling department store chain said on Tuesday that it is seeking court approval to liquidate all of its remaining stores and assets. The retailer expects the court to hear the motion on Oct. 13. Pending approval, liquidation sales could start as of Oct. 19, and continue for 10 to 14 weeks, according to the retailer.
In June, Sears Canada filed for protection from its creditors and announced it would be restructuring under Canada’s Companies’ Creditors Arrangement Act. At that time, the company got court approval of a sale and investment solicitation process (SISP) to seek out proposals for the acquisition of, or investment in, the Sears Canada Group’s business, assets and/or leases, and to implement one or a combination of proposals.
Sears Canada received and implemented going concern transactions for various lines of business. Despite exhaustive efforts, no viable transaction for the retailer to continue as a going concern was received. Thus, Sears Canada, with the recommendation of its advisors and approval of the Monitor, FTI Consulting Inc., is seeking an order to commence a liquidation that would result in a wind-down of its business following court approval.
“The company deeply regrets this pending outcome and the resulting loss of jobs and store closures,” according to Sears Canada.
The store closures will result in in loss of about 12,000 jobs, according to Bloomberg.
Amid a Q4 loss, luxury retailer eyes growth through digital commitment
Despite posting its third annual fiscal loss, Neiman Marcus is launching a new digital strategy to help strengthen the brand going forward.
The struggling luxury chain narrowed its net loss to $366.3 million for the fourth quarter and fiscal year ended July 29, compared to a net loss of $407.3 million in the prior year. Total revenues were $1.12 billion, a 0.5% decrease in comparable revenues from the fourth quarter of fiscal year 2016.
The company credits these smaller losses to its growing online sales. In fact, Neiman Marcus CEO Karen Katz said the retailer’s online business “will continue to outperform our store business at 30% of total sales. It will continue to grow in importance,” according to the Dallas News.
This factor is pushing the company to pursue its new “Digital First” strategy. The program is designed to further its leadership position in the luxury retail space by anticipating customers’ evolving behaviors and engaging them more deeply to drive traffic online and in stores, according to Neiman Marcus.
For fiscal year 2017, Neiman Marcus reported total revenues of $4.71 billion — a 5.2% decrease in comparable revenues. The company also reported a net loss of $531.8 million for the fiscal year compared to a net loss of $406.1 million in 2016.
In addition to growing online sales, the company credits narrower sales declines to greater sales stability at full-line stores, and improved inventory alignment. It is also benefitting from a new inventory system that allows stores to see merchandise in stock across both chains and in warehouses, according to Dallas News.
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.