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jerryking : creditors   3

Latest to Be Blamed for Retailers’ Woes: Private Equity - WSJ
By Lillian Rizzo
Updated July 30, 2017
A wave of retail bankruptcies washing through court has revived an old debate about the role of private-equity firms in accelerating the problems of companies in distress......"During that same time, Payless was also grappling with dwindling mall foot traffic, consumers shifting to spending online, changing trends and many store leases. Since the bankruptcy filing, hundreds of Payless stores have been closed, and employees have been laid off."

Vendors and landlords alleged in court papers that the dividend payouts, along with other payments to the investors, left the retailer particularly vulnerable to collapse just as technology and shifting consumer behavior upended the retail industry.

“The depletion of their coffers put the company on a dangerous path that ultimately led to this instant bankruptcy filing,” a group of Payless’s unsecured creditors said in June court papers.
retailers  bricks-and-mortar  private_equity  investors  bankruptcies  foot_traffic  creditors  store_closings 
july 2017 by jerryking
Mall Owners Flex Hidden Muscles Over Lenders - WSJ
increasing uncertainty over the fate of malls across the U.S., stemming from the rise of e-commerce and fickle consumer preferences, have led to more volatile valuations in recent years.

Landlords who owe millions of dollars on struggling shopping malls are finding they have serious bargaining power.

At a time when retailers are closing thousands of stores across the U.S., some lenders are deciding to renegotiate loans backing malls—and suffer guaranteed losses—rather than run the risk of being stuck owning or operating the malls themselves.

Shopping mall owner Washington Prime Group WPG -0.94% last June defaulted on an $87.3 million loan backing Mesa Mall in Grand Junction, Colo., and turned the keys over to creditors.
Rather than operate the mall, the creditors quickly sold the property—right back to Washington Prime—at a lower price. Late last month, Washington Prime told investors it had repurchased the mall and secured a discounted payoff of the original loan for $63 million.

While the creditors, a collection of bondholders such as insurers and other institutional investors, took a write-down of $24.3 million, they avoided having to own or operate the mall themselves.

In April 2016, real-estate research firm Green Street said roughly 800 stores should be closed to bring department-store retailers back to a level in which sales per square foot is in line with 2006 levels, a period considered normal.

Now the research firm is raising the tally.

“Just a year later, the 800 number looks much too light on a strict sales productivity standpoint and is much lower than what will ultimately be needed as the industry will likely need to massively rationalize its store count as it reinvents its business model,” Green Street said in a report.
“There’s a secular change in how people are shopping at the mall, which is affecting short-term value-enhancement strategies,”
shopping_malls  creditors  landlords  commercial_real_estate  sales_per_square_foot  store_closings 
july 2017 by jerryking
Creditors from hell
September 2005 | Chain Leader | by David Farkas
turnarounds  hedge_funds  creditors  due_diligence 
september 2012 by jerryking

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