Tween/teen accessories retailer reportedly close to filing Chapter 11
The chain where countless young girls had their ears pierced is said to be on the edge of filing for bankruptcy.
Clarie’s Stores, burdened with a $2 billion debt load that goes back to its 2007 leveraged buyout by Apollo Global Management, is preparing to file for bankruptcy in the coming weeks, Bloomberg reported. Its load is more than 10 times a key measure of its annual earnings.
As part of a Chapter 11 agreement, control of Claire’s would pass from Apollo to lenders such as Elliott Capital Management and Monarch Alternative Capital, the report said.
In addition to its heavy debt, Claire’s, which operates some 3,000 stores around the world, has been impacted by the slowdown in mall traffic. The retailer has been expanding to new areas, including signing agreements to sell its goods at CVS and Giant Eagle.
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Neiman Marcus returns to profitability in Q2
Neiman Marcus Group reported its second consecutive quarter of year-over-year sales growth as the company’s recent investments in new technologies and marketing tools and digital emphasis appear to be paying off.
The company reported net earnings of $346.3 million for its second quarter, ended Jan. 27, compared to a net loss of $140.6 million in the year-ago period. Including a provisional non-cash income tax benefit of approximately $384.1 million in the second quarter of fiscal year 2018 and non-cash impairment charges of $153.8 million in 2017, total revenues in the quarter rose 6.2% to $1.48 billion. Same-store sales increased 6.7%.
“I am excited about our momentum, which underscores Neiman Marcus Group is truly unique within our industry for our ability to deliver on a personalized luxury shopping experience across channels and brands,” commented Geoffroy van Raemdonck, CEO, Neiman Marcus Group. “We will continue to innovate and invest in the business to envision new ways to serve the luxury customers of today and tomorrow.”
van Raemdonck took the reins of Neiman Marcus in February, succeeding Karen Katz, who retired after holding the top job for some 10 years. Prior to Neiman Marcus, served as group president for EMEA (Europe, Middle East and Africa) and global travel retail at Ralph Lauren.
Karen Katz did not retire on her own! And the former President of Bergdorf’s Josh Shulman didn’t walk he ran before more came crumbling down. Sales associates are being let go for not making their numbers. You cannot make your goals when the company which includes Bergdorf Goodman doesn’t buy enough merchandise or sizes. They take the merchandise from the floor to sell to internet clients which leaves the sales associates with no sizes for customers walking into the store. They use this against the sales associates, especially the ones that are there longer because their hourly rate and commission are higher specifically at Bergdorf because Neimans associates are straight commission. They then hire people at the minimum wage and 2% commission the least amount they can pay. They spent millions redoing the 1st floor at Bergdorf’s which left clients who shopped their for years going elsewhere. They no longer felt comfortable in what was to many a 2nd home. Some would even stop by just to say hello, but no longer. In the fall of 2016 they decided to reticket merchandise which kept stock off the floor leaving departments bare through fall season. The designer shoe department shipments were being held captive at the warehouse with nothing for the over 40 associates to sell. They were shipped to the store when it was now time for markdowns. Almost all associates in shoes went on what they call “final warning”! If you don’t make your numbers you are then FIRED!! They also told employees who had to take a leave of absence for personal or health reasons ie: knee, hip operations that they were responsible to make their numbers for the season which is the 1st time they did that, people lost their jobs it was impossible,especially in one of the worst retail climate in years. Everything always looks good from the outside unless like me you worked on the inside.
Big Lots posts mixed Q4; CEO still on medical leave
Big Lots beat profit expectations for the fourth quarter but reported an unexpected decline in same-store sales amid slow growth in its furniture category.
The discounter also noted that president and CEO David Campisi remains on medical leave. It did not provide any insight as to when he would return.
On Big Lot’s quarterly conference call, executives said that the chain plans to convert about 180 stores into its updated store model, or store of the future format, this year. The concept has a softer, less promotional feel and highlights furniture, seasonal, and soft home and with prominent positioning up front.
Big Lots reported income of $104.8 million, or $2.46 per diluted share, for the quarter ended February 3, from $90.1 million, or $1.99 a share, in the year-ago period. Excluding such non-recurring items as a provisional tax expense, adjusted income totaled $109.3 million, or $2.57 per diluted share, above analysts’ estimates for $2.44 per share. (The fourth quarter of fiscal 2017 included an extra week of operations.)
Comparable store sales decreased 0.1% for the fourth quarter of fiscal 2017, compared to our guidance of flat to an increase of 2%.
Net sales increased to a lower-than-expected $1.62 billion from $1.58. billion last year, with the increase resulting from the extra week, partially offset by a lower store count year-over-year. Same-store sales fell 0.1%, missing Street forecasts of a 1.3% increase.
As previously announced, Big Lots president and CEO David Campisi took a medical leave of absence in early December 2017 and remains on leave. His executive responsibilities are being overseen by Lisa M. Bachmann, executive VP, chief merchandising & operating officer, and Timothy A. Johnson, executive VP and CFO.
In addition, James R. Chambers, Big Lots’ non-executive chair of the board, continues to be available to spend additional time with the leadership team during the duration of Campisi’s medical leave.
The company also announced a new stock repurchase program of up to $100 million in shares, and increased its quarterly dividend by about 20% to 30 cents per share, payable April 6, to shareholders of record March 23.
For the full year, Big Lots posted net income of $189.8 million, or $4.38 per share, up from $152.8 million, or $3.32 per share, a year ago. Net sales increases 1.4% to $5.27 billion and same-store sales increased 0.4%.
Big Lots operates 1,416 stores in 47 states.
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