JOANN, Inc., aka Jo-Ann Stores Holdings Inc. aka JOANN aka Jo-Ann Fabrics and Crafts, the 80-year-old, Ohio-based, arts-and-crafts operator filed for Chapter 11 bankruptcy protection in the District of Delaware Bankruptcy Court, docket #24-10418 (CTG) on March 18, 2024.

According to The New York Times, the retailer has a deal with its lenders for a $132 million cash injection to reduce its debt by $505 million, a process that will result in the retailer, which is listed on the Nasdaq stock exchange, being taken into private ownership. The court filings show liabilities of $1 billion to $10 billion and assets of $500 million to $1 billion. With about 800 stores nationwide, it appears the retailer will continue to operate as it closes the deal with lenders.

As noted by our recent blog 10 Retailers to Watch for a Possible Bankruptcy Filing in 2024, JOANN has continued declining sales, comps, margins, and increasing costs, creating an uphill battle for the crafts retailer. Further, as The New York Times reported, the retailer has been coming down from a short-lived sales boom during the pandemic lockdowns when there was a frenzy in consumers spending on at-home projects.

If you are a landlord or trade creditor of JOANN, it is important to know your rights now. Stark & Stark’s Shopping Center and Retail Development Group can help. Our bankruptcy attorneys regularly represent landlords throughout the country, including recently in the Eastern District of Missouri, District of New Jersey, Southern District of New York, District of Delaware, District of Minnesota and the Western and Eastern Districts of Pennsylvania regarding a variety of issues. Most recently, our Group has represented landlords and trade creditors in the Rite Aid, Party City, David’s Bridal, Christmas Tree, Buyk, Tuesday Morning, Mattress Firm, Toys R Us, EMS, Golfsmith, RadioShack, and Sports Authority chapter 11 bankruptcy cases.

For more information on how Stark & Stark can assist you, please contact shareholders Thomas Onder at (609) 219-7458 (tonder@stark-stark.com) or Joseph Lemkin at (609) 791-7022 (jlemkin@stark-stark.com).

The post JOANN’s Chapter 11 Bankruptcy Filing: Stitching Together a Reorganization appeared first on Stark & Stark, PC.

2024 holds much anticipation. The Fed rate hikes have started to reduce inflation, yet some prices remain high. Unemployment figures persist at record lows despite many large employers cutting back. Continuing supply chain issues persist as China reopens in the face of its COVID crisis. And consumer spending is tightening in preparation for bumps in the year ahead. Will we avoid a recession and have a soft landing? This volatile mix of economic data may lead several retailers to use the bankruptcy process to stay viable.

Following are our top 10 retailers to watch for a possible Chapter 11 filing in the year ahead.

1. Petco – Is Fido Chasing a Chapter 11 Bone? According to Retail Dive, the company has a high long-term debt load of $1.7 billion. According to iHeart, the company’s FRISK Score at the end of last year was 2 with CreditRiskMonitor, which represents a 4% to 10% chance of bankruptcy in the next 12 months. These factors could lead the 1,500 store chain to think about reducing its footprint through a bankruptcy filing.
2. JOANN – Crafting a Chapter 11 Plan? Retail Wire reports that Jo-Ann Fabrics, now known as JOANN, continues with declining sales, comps, margins, and increasing costs, creating an uphill battle for the crafts retailer. The Corridor Business Journal reported that heavy debt and declining sales decreased the Fabric and craft store to a CreditRiskMonitor FRISK Score of 1. It seems like it may only be a matter of time before the retailer sews the Chapter 11 blanket.
3. Express – Is it on the Fast Track to a Filing? The Wall Street Journal reports that Kirkland & Ellis has been hired by the Ohio based-retailer for debt restructuring, which could include the filing for Chapter 11 in a few weeks. Reuters notes that the company stock shares were down 59% in 2023 and fell 23% in recent trading.
4. AMC – Does it Have a Second Act? Recently, Market Watch highlighted a post of CEO Adam Aron, who derided the “prophets of doom,” declaring that AMC is still innovating and blazing trails. The company has reduced its debt burden and liabilities. Still, its shares have fallen more than 80% in the last 12 months compared with the S&P 500 SPX index’s gain of more than 20%.
5. Big Lots – Lots of Issues. iHeart reports that the big box retailer scored a 2 from Credit Risk Monitor, meaning there is a 4 to 10% chance of bankruptcy in the next year. In a recent earnings call, the company noted call that low-income customers are delaying or pulling back on discretionary spending. Bloomberg Law reports that the company is seeking new financing to address its years of losses and shrinking liquidity. Can the company stave off a Chapter 11 filing?
6. Kohl’s – Can a Department Store Survive in This Market? According to Forbes, the retailer’s stock has dropped 60% from its pre-inflation high (May 2021). In addition, the retailer is still struggling to adjust to consumer buying habits, which have shifted away from department stores. Yet, Yahoo Finance notes that the company has invested in new vendor relationships and is focused on accelerating its digital business. Only time will tell if the department store retailer can avoid a Chapter 11 filing.
7. Foot Locker – Is the Shoe Dropping? According to The Street, the athletic shoe retailer said it would close 400 stores by 2026 – most with expiring leases and underperforming stores. Footwear News says that this would take the company to about 2,400 stores.
8. Stein Mart – Is a Chapter 22 in the Near Future. The discount retailer for items like home goods and clothing previously filed for bankruptcy in 2020, emerging with a confirmed plan in 2021. According to data compiled by Creditsafe, The Street reported that the company was at least 90 days behind on bills. Further, Finance Buzz reported that the company hired restructuring personnel – a possible sign of an impending bankruptcy.
9. The Container Store. Marie Kondo kickstarted the decluttering bug, leading to several stores catering to organizing, like the Container Store. According to Finance Buzz, the retailer reported poor earnings 2023 with quarterly sales falling by 20%, despite the zeitgeist. In addition, the company recently laid off roughly 2.5% of its total workforce, according to Retail Dive. Unless something changes, a bankruptcy filing may be on the horizon.
10. JCPenney – Is a Chapter 22 in the Near Future. Although Simon Property Group and Brookfield Asset Management rescued the company for $1.75 billion in 2020, FinanceBuzz Finance Buzz reports that the department store continues to face sales issues, which could force more store closures. However, The Street reported in late summer a $1 billion revival plan to upgrade the in-store experience. Only time will tell if the store can avoid a second Chapter 11 bankruptcy – a “Chapter 22”.

Stark & Stark’s Shopping Center and Retail Development Group regularly represent owners, developers, and/or landlords throughout the country in leasing, buying/selling, 1031 Exchanges, refinancing, and enforcement activities.

One of our Group’s specialties is bankruptcy representation/protection for owners, developers, and/or landlords nationally. Currently, our team is providing value-added services in several national Chapter 11 cases, including Rite Aid, Party City, WeWork, Buyk, Regis, Stage Stores, Modell’s, 24 Hour Fitness, Sears, Art Van, Ascena, NPC, Toys R Us, Charming Charlie Part 2, and A&P.

For more information on how Stark & Stark’s Shopping Center Group can assist you, don’t hesitate to contact Thomas Onder, Shareholder, at (609) 219-7458 or tonder@stark-stark.com, as well as Joseph Lemkin at (609) 791-7022 or jlemkin@stark-stark.com. Tom and Joe write regularly on commercial real estate issues and are both active members of ICSC. Tom is Marketplace Director for ICSC’s Philadelphia region and a member of the ICSC Legal Advisory Council.

The post 10 Retailers to Watch for a Possible Bankruptcy Filing in 2024 appeared first on Stark & Stark, PC.

Rite Aid Corporation, one of the largest pharmacy chains in America, filed for Chapter 11 bankruptcy protection in the District of New Jersey bankruptcy Court, docket #23-18993 (MBK) on October 15, 2023. According to The New York Times, heavy debt, declining sales, and more than a thousand federal, state, and local lawsuits claiming it filled thousands of illegal prescriptions for painkillers led the retail pharmacy to seek bankruptcy protection. Rite Aid has about 2,000 locations in 17 states.

The company has filed a number of motions for first day orders that is set for 1:00 pm today, October 16, 2023 before the Court.

If you are a landlord or trade creditor of Rite Aid, it is important to know your rights now. Stark & Stark’s Shopping Center and Retail Development Group can help. Our bankruptcy attorneys regularly represent landlords throughout the country, including recently in the Eastern District of Missouri, District of New Jersey, Southern District of New York, District of Delaware, District of Minnesota and the Western and Eastern Districts of Pennsylvania regarding a variety of issues. Most recently, our Group has represented landlords and trade creditors in the Party City, David’s Bridal, Christmas Tree, Buyk, Tuesday Morning, Mattress Firm, Toys R Us, EMS, Golfsmith, RadioShack and Sports Authority chapter 11 bankruptcy cases.

For more information on how Stark & Stark can assist you, please contact shareholders Thomas Onder at (609) 219-7458 (tonder@stark-stark.com) or Joseph Lemkin at (609) 791-7022 (jlemkin@stark-stark.com).

The post Rite Aid Chapter 11 Bankruptcy Filing: Just What the Doctor Ordered appeared first on Stark & Stark, PC.

David’s Bridal, Inc., the wedding dress retailer, filed for a second Chapter 11 bankruptcy proceeding in less than five (5) years. Although the last filing was in Delaware, this filing is before the Honorable Christine M. Gravelle of the District of New Jersey Bankruptcy Court in Trenton, New Jersey, under case Number 2313131 (CMG).

According to reports from NBC News, the company plans to operate its 300 stores and stay in business while it looks to sell key assets.

The company has filed a number of motions for first-day orders that is set for 2:00 pm today, April 17, 2023, before the Court.

If you are a landlord or trade creditor of David’s Bridal, it is important to know your rights now. Stark & Stark’s Shopping Center and Retail Development Group can help. Our bankruptcy attorneys regularly represent landlords throughout the country, including recently in the Eastern District of Missouri, District of New Jersey, Southern District of New York, District of Delaware, District of Minnesota and the Western and Eastern Districts of Pennsylvania regarding a variety of issues.

Most recently, our Group has represented landlords and trade creditors in the Party City, Buyk, Tuesday Morning, Mattress Firm, Toys R Us, Payless, Eastern Outfitters (EMS Part 2), EMS, Golfsmith, RadioShack, General Wireless (RadioShack 2), Gander Mountain, A&P, Joyce Leslie, rue21, Central Grocers and Sports Authority chapter 11 bankruptcy cases.

For more information on how Stark & Stark can assist you, please contact shareholders Thomas Onder at (609) 219-7458 (tonder@stark-stark.com) or Joseph Lemkin at (609) 791-7022 (jlemkin@stark-stark.com).

The post David’s Bridal Files Second Chapter 11 Bankruptcy in Five Years appeared first on Stark & Stark.