Methodology

The Deal’s data experts compile and analyze the details of M&A, Private Equity, Bankruptcy, Out-of-Court Restructuring, PIPEs and Life Settlement transactions on an ongoing basis. League Table rankings are released quarterly and update cumulatively throughout the year. Any data provided by contributors is verified before consideration for The Deal’s League Tables.  Any firm contributing transaction details is encouraged to submit data as soon as a deal is announced to ensure they are counted in the quarterly updates.  Preliminary rankings are posted on the first business day of the new quarter.

The Deal Power Rankings

Search

*Required Field

Retail, #MeToo Dominate 2018 Bankruptcies

By Stephanie Gleason | Published on December 31, 2018

Finally.

The curtain has lowered on 2018 and no longer must we speculate about whether this will be the year Sears Holdings Corp. files for bankruptcy. Amid a rash of retail filings, Sears did what it’s long been expected to and filed for Chapter 11 bankruptcy on Oct. 22. Many questions remain in the case, including whether the giant will make it out of bankruptcy. If it can line up going-concern bids, an auction for the retailer would take place on Jan. 14.

Meanwhile, another retail case was one of the most interesting of the year, and more action is coming in January and February.

Nine West Holdings Inc. is headed for a contested confirmation hearing that could last a week as creditors fight a $105 million settlement with private equity owner Sycamore PartnersCreditors say the figure is way too low and that claims against Sycamore could be worth closer to $1 billion.

Also embedded in the fight is Sycamore-owned Belk Inc., a department store that cancelled its business with Nine West as the creditor fight waged. Nine West has requested an additional $22 million in bankruptcy financing to cover professional fees and operating costs as it tries to survive this fight. A hearing on that financing is scheduled for Jan. 10

It was widely expected that the so-called retail apocalypse (to bring back a term that just a year later feels horribly dated) would continue, and worsen, in 2018–but the year didn’t quite deliver on those predictions.

According to Coresight Research, there have been 5,437 retail store closures in 2018 as of Dec. 28. That number was driven by 881 Toys ‘R’ Us shutterings and 600 Walgreens. Additionally, Sears and Mattress Firm each closed 472 and 388, respectively.

For 2017, Coresight tracked 8,139 store closures as Radioshack liquidated and closed its last 1,470 stores and Payless shut 700 stores.

Fitch Ratings Senior Director David Silverman said recently of retailers that have survived the last few years are “benefitting from less competition as a result of store closings.”

Topping the ratings firm’s list for likely 2019 bankruptcy filers is FULLBEAUTY, a plus-size apparel retailer that skipped an interest payment in December. Additionally, on Fitch’s list of loans and bonds of concern are retailers Neiman Marcus Group Inc.Fresh Market Inc., Moran Foods LLC, TOMS Shoes LLC, Indra Holdings Corp., Iconix Brand Group Inc., Fairway Group Acquisition Co., NYDJ Apparel LLC and Charlotte Russe Inc.

There continued to be some distress in oil and gas and some of the shake-out expected in healthcare came to pass–trends that are each expected to continue into 2019. As is trouble from tariffs implemented this year by President Donald Trump.

Less expected was the way that much of the fall out of the #MeToo movement is playing out before bankruptcy courts.

Following the October 2017 New York Times article chronicling years of alleged sexual harassment and assaults by Harvey Weinstein, his movie production firm filed for Chapter 11 bankruptcy in March after a failed sale.

The assets were ultimately sold through bankruptcy, but the case continues to impact Weinstein, who’s seeking use of his company emails to defend himself against both civil and criminal charges.

Celebrity chef Mike Isabella placed his restaurant chain into bankruptcy this year after reaching a settlement with an employee that accused him of sexual harassment. He said the press coverage had caused customers to stay away from his restaurants. Following an attempt to restructure around a smaller group of restaurants, Isabella is liquidating the company.

Jaws dropped when just this month USA Gymnastics filed for Chapter 11 bankruptcy, and the following week the Wall Street Journal reported that the Boy Scouts of America was considering something similar. Catholic dioceses continued a steady stream of bankruptcy filings this year. More dioceses are expected to file in 2019 — three have already announced their intention to file — following a Pennsylvania grand jury report in August that found even more widespread and systematic cover-up of abuses by Catholic priests.

Subscribers have access to more of the deal data that fuel these rankings here.

Not a subscriber?  Request a personalized demo here.