Fred’s Pharmacy
Fred’s is a bargain pharmacy that used to give dollar stores and Walmart a run for their money. The Tennessee-based company has been in business for more than seven decades. Recently, CVS purchased Fred’s three specialty pharmacy stores, and they say they have plenty of other non-core assets to sell.
Several hedge fund companies increased their investment in the pharmacy, signaling Fred’s may avert a bankruptcy filing. Royce & Associates, a large institutional investor, picked up almost 2 million shares of Fred’s in the last quarter of 2018. In January 2019, Walgreens purchased 185 of Fred’s 650 retail chains. Next time you go to Fred’s, the sign may read Walgreens instead!
JCPenney
JCPenney's revenue for 2018 was down significantly. Nine of the closures that year were of its home and furniture locations. JCPenney has been bleeding employees and stores since 2014. No word on how many jobs were lost that year. JCPenney picked up a new CEO last year, Jill Soltau.
Soltau’s efforts to turn the debt-heavy department store chain around include getting out of appliance sales and focusing on apparel. While appliances have been expected at stores like JCPenney and Sears, the $4.2 billion debt needed to be relieved somehow. Cutting 2,200 jobs and closing a total of 8 stores, as it did in 2018, also lowers costs. After 117 years of retailing, all the king’s horses and all the king’s men may not be able to restructure JCPenney again.
A’GACI
Two days before Kiko filed for bankruptcy, A’GACI slipped over the brink. On January 9, 2018, the trendy-chic fashion apparel company filed to reorganize. For girls and young women (and, yes, millennials who self-identify as female), there is a light at the end of A’GACI’s tunnel. By August 2018, the company reemerged with a plan to maintain business as usual, much to its customers' delight.
Affordable fashion, always on-trend, became available at all 27 of its existing locations. As the chain used to offer 76 brick-and-mortar options, it’s a pretty big hit; however, David Won, A’GACI’s Chief Merchandising Officer, was optimistic.
Bebe
Bebe is another store that has fallen victim to lagging mall traffic. But it has other problems as well. Sales were abysmal. In May 2017, the company announced it was closing all 180 of its retail outlets and liquidating all merchandise. Bebe was able to move sales into the e-tailing marketplace, thus avoiding a bankruptcy filing. Uniquely, Bebe had very little debt plus a good amount of cash. This helped the company get out of its mall leases relatively easily.
They could offer the leaseholders a better deal than the bankruptcy court would have. As far back as 2010, the 1976-established brand appeared to be losing to lackluster. Founder and CEO of the skimpy-sexy Bebe-wear chain, Manny Mashouf, seemed to lose his way and navigated the company in a direction his shoppers abandoned. His ex-wife, Neda Mashouf, left the company as vice chairman in 2008, and things went downhill from there.
David’s Bridal
David’s Bridal is yet another mall shop that has succumbed to massive debt. Last year the company filed for bankruptcy protection, cutting a deal to reduce its debt by over $400 million. The bridal shop was purchased from former owners Clayton, Dubilier & Rice by a group of lenders, including Oaktree Capital and Conshohocken, assuring the stores will continue to operate.
In case you’re wondering why David’s Bridal racked up so much debt, they will tell you. It’s the Millennials' fault. When all else fails, blame the Millennials. Apparently, folks of the marrying demographic, who we call Millennials, have been waiting to get married. Not only that, but when they do opt for marriage, they choose nontraditional styles. The other culprit is online shopping, naturally.