by Sarah Mahoney @mahoney_sarah
Source: www.mediapost.com, February 2024
With the holiday season fast receding, it’s becoming clearer which retailers are struggling to hang on. Big Lots, the Body Shop, Express, and the Children’s Place — all stalwarts of the American mall — are the latest to make financing headlines.
The Wall Street Journal reports that Express is scrambling to restructure debt and could file for bankruptcy in the coming weeks. With more than 600 stores, the company has some $280 million in debt.
The fashion brand has underwhelmed consumers. In its most recent quarterly report, the company posted a 5% sales increase to $454.1 million. But sales fell 7% at Express and Up West, to $402 million, down from $434.1 million in the third quarter of 2022, with comparable sales declining 6%. Store sales sank 16%, while ecommerce revenues gained 10%. The company also owns Bonobos, with $52.1 million in sales for the quarter.
The Children’s Place is also looking for help and is working with advisors and lenders to seek new financing and strategic alternatives.
The company made that announcement last week after reporting that sales for the quarter are likely to reach between $454 million and $456 million, below its forecast. And it expects losses for the period to amount to between 8% and 9% of sales.
Bloomberg reports that Big Lots is another retailer looking for outside financing following a period of declining sales and liquidity issues.
And in a jolt from across the pond, the private-equity owner Aurelius has put the U.K. business of The Body Shop “into administration,” which is the Brits’ way of saying bankruptcy.
Aurelius is the company’s third owner in seven years. It bought the chain just three months ago from Natura & Co., the Brazilian company that also owns Avon. Natura had been looking to unload The Body Shop, once one of retail’s most-admired brands, for several months.
“Taking this approach provides the stability, flexibility and security to find the best means of securing the future of The Body Shop and revitalizing this iconic British brand,” the company says in a statement. “The Body Shop remains guided by its ambition to be a modern, dynamic beauty brand, relevant to customers and able to compete for the long term. Creating a more nimble and financially stable U.K. business is an important step in achieving this.”
The U.K. business is still trading, with no change for customers. The company operates over 900 company-owned stores in 20 countries, with 1,600 franchised stores in 69 geographies. And a spokesperson for The Body Shop tells Marketing Daily all stores in North America are open as well.
While British fans of the brand, who have long loved it for its cruelty-free products and sustainability commitments, fear the news will mean layoffs and closures, some observers think Aurelius will make sure it lives on, even in a scaled-back version.
The Guardian quotes Andrew Pepper, a restructuring expert at ReSolve, who told the paper that Aurelius was likely “slimming down the shops to create a right-sized business fit” with an intensified ecommerce focus. “What will they sell to the world if they don’t have the flagship business? They still believe in the Englishness of it. The real value is in its global presence.”
