Risk Management

Chapter 11 Watch: Hockey Chain Put On Ice, California Livin’ Goes Bust In Hong Kong

Chapter 11 Filings Don't Stop

Brick-and-mortar retail will forever remember the day that Nintendo released Pokémon GO, a mobile game that has caused millions of millennials to suddenly discover outside again. In all seriousness, Pokémon GO is in danger of overtaking Twitter in daily active users, and some retailers have begun experimenting with in-game methods to lure more players toward their store fronts.

It’s certainly not the type of pull marketing they teach in business school, but at the rate merchants keep showing up on the Chapter 11 Watch, retailers can’t be too pika-choosey about the ways they draw new customers in.

 

Bankruptcies

When unseasonably warm temperatures are cited by retailers as a contributing factor to unexpectedly low sales, it’s usually department stores doing the grumbling about the lack of shopper interest in heavy winter apparel. However, it turns out that high temperatures in December and January can also have a depressing effect on cold weather sports, too.

St. Louis Business Journal is reporting that Missouri-based hockey equipment supply chain Total Hockey has filed for bankruptcy as of Wednesday (July 6). According to a consultant hired by Total Hockey to help it right the ship, comparable same-store sales for the brand, which runs about 27 locations spread across the Midwest, were positive for every quarter up until Q4 2015, when they took an 8 percent dive. Q1 2016 sales were also down 5 percent, which was untenable enough for Total Hockey CEO Michael Benoit to negotiate an asset sale to Massachusetts-based TSG Enterprises for about $22.5 million.

“[Total Hockey] has worked with TSG over the last several weeks to ensure the best outcome for all of its creditors, customers, employees and suppliers,” Benoit said in a statement. “Total Hockey is asking for the court to approve a sale process that would culminate in an auction the last week of July.”

Total Hockey admitted to making some questionable acquisitions over the years — lacrosse-focused brand Players Bench being one — that proved difficult to integrate, so it’s time to hit the showers for this niche sport supplier.

 

Store Closures

As if it’s any consolation, odds are that Total Hockey’s Chapter 11 filing didn’t come as a complete surprise to those in the know. However, some retailers prefer to play cards of the kind as close to the corporate chest as possible. That does little to stop events already in motion from coming into the light of day eventually, and as Hong Kong’s California Fitness chain of gyms is finding out, it does even less to quell public outrage when it happens.

South China Morning Post is reporting that JV Fitness, the parent company of California Fitness, mYoga and Leap fitness brands running 12 locations in Hong Kong, has circulated a notice to club employees that it would be terminating operations effective immediately. This meant associates had to bar the doors on many clubs, but that will only help so much when the $1.28 million bill for alleged unpaid wages to JV Fitness’ staff comes due.

Not every brand that closes its doors did so last week in infamy, though. Longtime Texas grocery fixture Minyard Food Stores did so last week as it sold its last nine store fronts and two subsidiary locations to Fiesta Mart, The Dallas Morning News reported. Minyard was founded back in 1932 and, at one point, operated more than 80 locations throughout the South. However, selloffs over the years chipped away to where Minyard found itself this week, though Fiesta Mart CEO Michael Byars — a former Minyard employee himself from 2005 to 2009 — believes there’s still some valuable assets to work with.

“Minyard has a rich heritage and good people working there,” Byars said. “I believe we can take those stores and make them better with some capital, improved assortment and mix of products.”

 

Layoffs

What a time to be alive to witness a global economy that has brands failing in hemispheres both East and West. And just in case merchants in the U.K. feel left out of the limelight now that the Brexit’s 15 minutes of fame are up, one of the country’s biggest general goods retailers is getting the island back on the retail layoff map.

Not only has Sainsbury’s given the official axe to 400 employees working at the chain of 16 stores run as a joint venture with Danish Dansk Supermarked Group, but it’s also sent out a warning that it could layoff up to 600 more employees as a result of its £1.4 billion acquisition of Home Retail Group. The onboarding, which isn’t expected to be complete until September, will also lead to new positions at Argos stores, Sainsbury’s said, but it’s impossible to know whether the net will be a gain or loss.

Though if you’re one of the employees affected by Sainsbury’s staffing decisions, it’s probably pretty clear.

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Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. The July 2019 Pay Advances: The Gig Economy’s New Normal, a PYMNTS and Mastercard collaboration, examines pay advances – full or partial payments received before an ad hoc job is completed – including how gig workers currently use them and their potential for future adoption.

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