Shopping Centers Today is the news magazine of the International Council of Shopping Centers (ICSC)
Issue link: https://sct.epubxp.com/i/863214
18 S C T / S E P T E M B E R 2 0 1 7 Stores, Eastern Outfitters, Gymboree, Gordmans, The Limited, Pathmark, Payless ShoeSource, Rue21, Sports Authority, True Religion, Waldbaum's and Wet Seal. Gymboree, which is in the process of closing 450 of 1,300 stores world- wide, filed for Chapter 11 bankruptcy protection in June. The company says it continues to struggle with debt from its October 2010 buyout, when Bain Capital took the chain private for $1.8 billion, including $524 million in equity. In court filings, Gymboree outlined plans to improve its online store to compete with peers Gap and The Children's Place. Gymboree's unsecured creditors, for their part, have said in court filings that they are considering claims against Bain and other insiders. Payless and its creditors have com- plained that the hundreds of millions of dollars in debt it assumed through the private equity ownership of Gold- en Gate Capital and Blum Capital led to the discount shoe chain's financial collapse. Meanwhile, struggling luxury retailer Neiman Marcus says a sizable chunk of debt from its $6 billion leveraged buyout in 2013 by Ares Management and Canada Pension Plan Investment Board from other private equity compa- nies is frustrating its attempts to right the ship, according to pub- lished reports. A term loan of near- ly $3 billion is slated to come due in 2020. Neiman Marcus, which has struggled with problems on its e-commerce site, backed out of an IPO filed in 2015. Another private equity com- pany, Sycamore Partners, is acquiring Staples for about $6.9 billion, paying $10.25 a share, a 12 percent premium to its June 27 price when news of the acquisition broke. To help fund the takeover, Sycamore is dividing the office-supply chain into three separately financed units. About 60 percent of Staples' revenue comes from online orders, according to GoodHaven Capital Management, which owns 1.2 million shares of the chain. Davidowitz says private equity companies tend to seek out retail- ers they perceive as undervalued, then look to remove costs by cutting facilities and employees, but fail to devote sufficient funds to branding, digital operations and other key areas. "They're loading up these chains with debt and leaving them with no way to go but down," said retail consultant Jeff Green, proprietor of an epon- ymous firm in Phoenix. "Private equity obviously doesn't know THE TOP SOURCE FOR NET LEASE REAL ESTATE LISTINGS NNNEX is a marketplace to list or buy net-leased retail, office or industrial properties throughout the United States. Since its 2005 launch, NNNEX members have listed and sold more than $5 billion of net-leased real estate. NNNEX features a continuously growing pool of property listings added directly by sellers or brokers Offering a FREE STANDARD LISTING and FREE EMAIL CAMPAIGN to new users EMAIL us for your free promo codes: PROMOS@nnnex.com www.nnnex.com S T O R E F R O N T S