Lucky Brand is the latest victim in retail.
The denim and fashion retailer filed for bankruptcy on Friday, citing difficulties from the Covid-19 pandemic and the secular change of brick and mortar, the Associated Press reported.
Among the suitors for the distressed retailer is Simon Property (NYSE: SPG) affiliate SPARC Group, which, according to the restructuring officer, can buy the firm for $ 140.1 million in cash and more than $ 55 million in credit. . Simon Property is also one of the main owners of Lucky. SPARC operates other trademarks such as Aeropostale and Nautica.
Lucky will close 13 stores, more likely to come. It operates more than 200.
The deal is expected to close in August, with a backup transaction waiting in case the SPARC deal doesn’t materialize.
The bankruptcy filing adds to the growing difficulties in names exposed to retailers and with liquidity restrictions. Presentations increased 26% yoy in H1 2020, according to Epiq Systems, and included JC Penney (OTCPK: JCPNQ), Hertz (NYSE: HTZ), Chesapeake Energy (OTCPK: CHKAQ), Quorum Health (NYSE: QHC) , Pier 1 Imports (OTCPK: PIRRQ), Frontier Communications (NASDAQ: FTR), 24 Hour Fitness, J. Crew and CEC Entertainment, the parent company of Chuck E. Cheese.
A large franchisee from Yum Brands (NYSE: YUM) and Wendy’s (NASDAQ: WEN), NPC International, filed for bankruptcy earlier this week.
In other retail developments, Barron’s named Sally Beauty (NYSE: SBH) and Michaels (NASDAQ: MIK) among the stocks that could benefit if something goes right, given their “not loved” status.
