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  • INDUSTRY NEWS

    • On October 18, 2018, it was reported, Target is more than doubling its holiday toy assortment and making room in stores by a "quarter-million additional square feet" to accommodate the additional merchandise and in-store events for children and families, the company said in a blog post this week. Target stores will host more than 25,000 hours of holiday playtime and events, including opportunities to play with toys, meet characters based on favorite toys and win giveaways, according to the post. The mass merchant will offer "more than 2,500 new and exclusive toys," and more than 100 of its remodeled stores' toy sections have a new layout, oversized displays, interactive play areas and book sections. In November, additional stores almost 500 will have bigger spaces "to make room for even more toys," including elaborate setups like electric ride-on vehicles, playhouses and outdoor playsets, the company said. Later this month, the retailer is making it easier to shop the assortment through an online "Toy Hub," which includes a gift finder function. A paper toy catalog, in the mail next week and in stores Oct. 28, includes digital barcodes that provide product information and the ability to add products to an online shopping cart.
    • On October 17, 2018, it was reported, David's Bridal missed an interest payment on $270 million in unsecured notes, according to a Tuesday press release from S&P Global emailed to Retail Dive. The ratings agency downgraded the apparel retailer's credit rating to a level indicating selective default. David's Bridal did not immediately reply to Retail Dive's request for comment. The missed payment sets into motion a 30-day grace period with debtholders before the retailer is fully in default. S&P analysts said in the release they believe David's Bridal is "highly unlikely" to make the debt payment as the company tries to preserve its liquidity. They added that a debt restructuring "either out of court or through a court reorganization" is "likely in the near future."
    • On October 16, 2018, Claire's Stores announced its exit from Chapter 11, noting in a press release that the company eliminated $1.9 billion of debt and gained access to $575 million in new capital. The retailer may not be finished regrouping however, considering a report from news agency the Press Association that Claire's is mulling the closure of U.K. stores. But in an email to Retail Dive, a Claire's spokesperson said there are "no plans for either a CVA [a U.K. process that provides for financial restructuring] or major store closures in the UK in the foreseeable future" and that "[a]ny stores we do close or open in the UK would be as part of our normal course of business." The company filed for Chapter 11 bankruptcy protection in March, but the proceedings didn't affect its international subsidiaries, according to its announcement at the time. The company runs 1,005 stores in Europe as of Aug. 4, according to a company press release.
    • On October 16, 2018, it was reported, a federal bankruptcy court gave Sears approval to tap $300 million in new bankruptcy financing so it can keep operating while in Chapter 11. The senior debtor-in-possession financing is backed by Bank of America, Wells Fargo and Citibank, banks that, according to reports last week, were pushing for Sears to liquidate ahead of its Chapter 11 filing. The court approval allows Sears to continue paying employee wages and benefits, and to honor member programs including warranties and promotions, the retailer said in a press release. Sears Chief Financial Officer Robert Riecker said in a statement that Sears would continue "to engage in productive discussions with our creditors and other stakeholders to pursue a plan of reorganization as expeditiously as possible." After filing for Chapter 11 on Monday, Sears' credit was summarily downgraded to default levels by ratings agencies Fitch and S&P Global. Sears plans to immediately close 142 stores in bankruptcy and is in talks to sell its remaining stores as a going concern to the hedge fund run by Eddie Lampert, the company's chair and former CEO. On October 10, 2018, it was reported, after years of speculation and financial losses, Sears is contacting banks to arrange the financing for a possible Chapter 11 filing, which might come as soon as this week, according to reports in The Wall Street Journal, which broke the story, and CNBC, that both cited unnamed sources. Sears did not immediately respond to Retail Dive's request for comment. The report comes as Sears faces a $134 million debt payment due Oct. 15 that ESL Investments, the hedge fund controlled by Sears CEO Eddie Lampert, described as among the retailer's "significant near-term liquidity constraints" in a recent proposal that would restructure some debt and transfer Sears assets to ESL. Lampert and ESL together own a controlling share in Sears, and ESL has loaned the retailer hundreds of millions of dollars. The Journal reported Tuesday evening that Sears hired boutique advisory firm M-II partners to work on a potential filing, though the retailer, according to unnamed sources, "continues to discuss other options and could still avert an in-court restructuring."