A federal judge approved a $243 million bid that would keep open 229 Aéropostale locations, meaning the retailer will exit Chapter 11 under new ownership.
Before it filed for bankruptcy in May, Aéropostale operated about 800 stores, but earlier this week, a bankruptcy judge approved an acquisition effort for the embattled teen retailer by a consortium of retail landlords and liquidators that includes Simon Property Group, General Growth Properties, Authentic Brands, Hilco Merchant Resources and Gordon Brothers Retail.
Sycamore Partners, Aéropostale’s largest debt holder, had been pushing hard to liquidate the company, but the consortium’s $243 million bid is going to allow the retailer to stay alive.
U.S. Bankruptcy Court Judge Sean Lane approved the sale in a Manhattan courtroom on Monday (Sept. 12), and Bloomberg reported that the deal would save at least 7,000 jobs.
“This could be a model for future restructurings in the years ahead,” Ray Schrock, a lawyer for Aéropostale, told the judge, according to Bloomberg.
Simon was a landlord for 160 Aéropostale locations when the retailer filed for bankruptcy in May, so the agreement also allows one of the largest mall landlords to avoid more vacancy space.
Sports Authority is still in the process of liquidating its remaining assets and closing the remainder of its stores, but another prominent sports retailer filed for bankruptcy this week as well.
Golfsmith International Inc., an Austin, Texas-based specialty golf retailer, filed for Chapter 11 bankruptcy on Wednesday (Sept. 14), according to Reuters. The company listed both assets and liabilities between $100 million and $500 million and said it plans to sell itself off or liquidate its business if that plan fails, according to the filing with the U.S. Bankruptcy Court for the District of Delaware.
Golfsmith has also reached an agreement to sell its Canadian retail chain, Golf Town, to a group led by Fairfax Financial Holdings Ltd. and a unit of CI Investments Inc., according to Reuters.
Bloomberg said that Golfsmith’s filing is yet another blow to sports apparel retailers, like Nike, Adidas and Under Armour, who are still trying to contend with the new landscape of the post-Sports Authority era.
“It’s the same story line as before — the game is still shrinking,” according to Chen Grazutis, an analyst at Bloomberg Intelligence. “Plus, stores are too big, and they are too close to each other.”
And the latest data suggests that international shipping exports continue to remain strong, despite the potential upheaval in the industry posed by the bankruptcy of Hanjin Shipping Co., a South Korean shipping company that handles about 7.8 percent of the U.S.’s trans-Pacific trade cargo, who filed for bankruptcy in late August.
Import cargo volume at major U.S. ports is expected to hit near-peak levels later this month. The monthly Global Port Tracker report from the National Retail Federation and Hackett Associates said that retailers are finding ways to work around the Hanjin hiccup as they gear up for the holiday shopping season.
“Hanjin should not significantly affect volume for the month since alternative arrangements to unload those containers or shift cargo elsewhere should be dealt with by the time the numbers are tallied,” according to Jonathan Gold, the National Retail Federation’s vice president for supply chain and customs policy. “But millions of dollars’ worth of merchandise is in limbo at the moment, and retailers are working hard to make sure it ends up on store shelves in time for the holidays.”
And the BBC told the strange, but also oddly heartwarming tale of one of the 60 or so Hanjin ships still marooned at sea as a result of the bankruptcy and its poor captain and crew who haven’t seen their home or families in weeks.