Barneys New York is reportedly in discussions with existing lenders, including Wells Fargo & Company, about a DIP Facility to fund operations if it decides to file for bankruptcy. The discussions are in the early stages, and management is still evaluating options that could avert a bankruptcy filing, such as forming “partnerships.” The Company has held meetings in Europe and Canada with potential buyers, according to sources, which also note that if the Company does elect the bankruptcy option, the filing could come as soon as this week. The Company reportedly has approximately $250.0 million of debt obligations, including a $200.0 million asset-based revolver provided by Wells Fargo and a $50.0 million term loan. A Company representative stated, “We continue to work closely with all of our business partners to achieve the goals we’ve set together and maximize value. Our board and management are actively evaluating opportunities to strengthen our balance sheet and ensure the sustainable, long-term growth and success of our business.”

PetSmart raised about $1.00 billion in proceeds from the Chewy IPO, and for the first time in a long time, was on the receiving end of some good news. Estimates have the Company paying down about $825.0 million of its debt, primarily its term loan and its 5.875% senior secured notes. The reduction will save the Company an estimated $47.0 million in annual interest expense, and reduce debt to TTM EBITDA to about 9.5x. The debt reduction, along with the lofty Chewy valuation in the $14.00 billion range, gave both rating agencies the impetus to upgrade the Company. S&P upgraded PetSmart’s first lien debt to “B” from “CCC” and the senior unsecured debt to “CCC+” from “CC.” Moody’s followed suit, raising the senior secured debt to “B2” from “B3” and the senior unsecured debt to “Caa2” from “Caa3.” With the volatility and fight with its lenders now behind it, PetSmart should be able to focus on its retail operation. As Chewy moves toward becoming operationally profitable, PetSmart’s metrics will also improve, as it still owns about 67% of Chewy. Store metrics have also improved, with fiscal 2019 first quarter numbers showing flat store sales, which was an improvement over the consistent negative trend during fiscal 2018. As pet owners spend more on premium products and continue with the “humanization” of their pets, the segment is expected to grow for the next few years and remain moderately recession proof, or at least recession-delayed should the economy slow.

Yum! Brands appointed new CEOs of Taco Bell (Mark King) and Pizza Hut (Artie Starrs), effective August 5. Mark King most recently served as president of Adidas Group North America. Artie Starrs is being promoted from president of Pizza Hut U.S. Click here to request a list of Yum! Brands Future Openings.

A receivable arising from a legal dispute with Transform Holdco (New Sears) represents one-third of the assets in the bankruptcy estate. The relatively high percentage reflects the fact that the asset balance in the estate has been falling, as the case is late in its lifecycle, and bank debt and intercompany items have already been paid. A confirmation hearing is scheduled for August 16.

Earlier this month, Walmart opened Walmart Pickup Point, a 40,000 square-foot prototype store in Lincolnwood, IL, to cater to customers’ online pickups and deliveries. Customers drive up to designated parking spots at the site, and Walmart workers load up their cars with their orders.

Retail Bankruptcies – Special Update

AggData’s Chapter 11 Recap takes a look back at the previous six months of retail bankruptcy activity from all 94 U.S. jurisdictions and presents the data by month, industry and state of primary operation.

CLICK HERE TO VIEW FULL REPORT

As part of United Natural Foods’ Pacific Northwest rationalization plan to consolidate five distribution centers to two, a WARN notice was filed indicating the Company will be laying off 116 workers at its Auburn, WA facility. The layoffs are expected to begin September 8. UNFI (Supervalu) will replace the Auburn facility, along with DCs in Tacoma, WA and Portland, OR with two facilities in western Washington. The closings come as a result of UNFI’s purchase of Supervalu last year. UNFI is building a new 1.2 million square-foot distribution center in Centralia and expanding its Ridgefield operations in Clark County by more than 500,000 square feet.