The big question next week centers on the future of Sears Holdings Corp., with its fate to be decided this time by a bankruptcy court judge. But next week also starts the beginning of earnings season, with apparel firms reporting first, to be followed later this month by department stores and then specialty retailers.
Also ahead is New York Fashion Week, when designers show their fall collections, although many also are likely to include a line-up of see-now, buy-now merchandise. In addition to NYFW, buyers will also be in force at trade shows looking for that special item to include in their doors.
Sears Bankruptcy: Will a bankruptcy court judge in White Plains approve the $5.2 billion going-concern offer from Sears chairman Edward S. Lampert and his hedge fund, ESL Investments? Presuming the hearing goes on as planned and doesn’t get postponed, some creditors are saying “not so fast.”
The unsecured creditors committee was quick to file legal documents that said it has a long list of reasons why Lampert should not be allowed to acquire the company. It has been joined by the Pension Benefit Guaranty Corp., a government pension watchdog and significant creditor. And Service.com is opposing the sale as well. After receiving court approval to acquire Sears’ Home Improvement business for $60 million, Sears turned around and rejected the deal in favor of the going-concern bid from Lampert, which included the Home Improvement business.
The hearing, which begins on Monday and could last several days, is expected to be contentious. Many believe that courts tend to give debtors a second chance because that route also saves jobs. But in the case of Sears, many observers expect the company to eventually liquidate anyway. That’s why creditors are pushing for a liquidation now while the retailer’s assets have a higher value and can help pay down the debt owed to unsecured creditors.
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Sears’ chief financial officer Robert A. Riecker has filed court papers refuting any suggestion that the business plan going forward isn’t sound. He noted that the company under the Go-Forward Plan has the potential to operate as a going-concern after exiting bankruptcy proceedings and that neither Lampert nor anyone else from ESL had any input, or even assisted, with the preparation of the plan. He also said his involvement in the plan’s preparation includes monitoring the company’s progress, reviewing the data and assessing whether the numbers provided were achievable.
Earnings: On the agenda next week are earnings from companies in the vendor world. They include Ralph Lauren Corp., Levi Strauss & Co., Capri Holdings Ltd., and Tapestry Inc. Retailers get their chance later this month. The report from Capri and Tapestry also will give a read on the North American handbag market at the department store channel.
Trade Shows: WWDMAGIC Las Vegas will begin on Monday and run through Thursday in Las Vegas. The show covers that latest in apparel, footwear, accessories and manufacturing. NY Now, the home, lifestyle and wellness that includes beauty, and handmade artisan merchandise show, runs Sunday through Wednesday in New York at the Jacob K. Javits Convention Center.
New York Fashion Week: New York Fashion Week: Men’s kicks off the start of the week, with shows on Monday through Wednesday. Then the women’s shows begin on Thursday and end Wednesday, Feb. 13, with events spread across different locations in the city.