Wednesday, April 20, 2016


"Vestis Retail Group, which operates the Eastern Mountain Sports, Bob’s Stores, and Sport Chalet chains, is preparing a bankruptcy filing, extending a run of retail-industry defaults, according to a person familiar with the matter. The company, owned by private equity firm Versa Capital Management LLC, could file as soon as next week, said the person, who asked not to be identified because the process isn’t public. The default would follow Sports Authority Inc.’s trip to bankruptcy court in March, underscoring the challenges of the sporting-goods industry. Other well-known retailers, including American Apparel Inc., Quiksilver Inc,. and Hancock Fabrics Inc., also have filed for Chapter 11 during the past year. And Pacific Sunwear of California Inc. may be headed for bankruptcy as soon as next week, people familiar with the matter have said. Versa, which specializes in buying distressed companies, built Vestis into a portfolio of outdoor-oriented retailers. The firm bought the money-losing Bob’s chain in 2008 from TJX Cos., acquiring a retailer known for casual clothing and sports-team apparel. It operates 35 stores, mostly in the Northeast. Versa purchased EMS in 2012, and it added Sport Chalet two years later to expand along the West Coast. A representative for Philadelphia-based Versa declined to comment."

"Eastern Mountain Sports to close eight stores" by Curt Woodward Globe Staff  April 18, 2016

The inhospitable climate for retailers claimed another victim Monday as the parent company of Eastern Mountain Sports said it will close eight outlets, including three in New England, part of a bankruptcy reorganization that will also hit Sport Chalet and Bob’s Stores.

Vestis Retail Group LLC, which owns the three chains, said the restructuring was prompted in part by competition from big-box stores and e-commerce sites, along with an unseasonably warm winter that sapped sales of cold-weather apparel in the Northeast.

Always blaming the weather like it's a bowl of porridge!

The move by Vestis comes less than two months after Sports Authority Inc., once the nation’s largest sporting-goods store, filed for bankruptcy protection and announced plans to close 140 stores.

No longer the authority, 'eh?

Another local athletic retailer, Boston’s City Sports, closed its 26 stores in November after failing to find a buyer in its own bankruptcy proceeding. Vestis is backed by the Philadelphia private equity firm Versa Capital Management.

They crapped out.

The company plans to continue operating the remaining 53 EMS and 35 Bob’s locations during the bankruptcy process. Vestis hopes to sell those stores to its private-equity investors by mid-summer, in time to gear up for the fall back-to-school shopping season.

“The combination of EMS and Bob’s will be a stronger business partner with a renewed focus on the core successful operations in the eastern US, where they will continue to operate an approximately $400 million multi-channel retailer,” Vestis said in a news release.

Vestis blamed a variety of problems for the store closings. The larger industry, it said, was becoming much more competitive, with big-box retailers on one end of the spectrum and smaller specialty sporting goods stores on the other.

Vestis indicated the Sports Authority bankruptcy may have dealt a decisive blow: The chain’s early March bankruptcy prompted deeply discounted store-closing sales, which “created unusual competition” for Vestis’s retail brands.


They were going out of business!!!!

Sucharita Mulpuru, a retail analyst for Forrester Research Inc., said the competitive pressure on mid-market retailers shouldn’t have been too much for Vestis to handle. She noted that mid-tier retailers in other segments, such as grocery and cosmetics, continue to do well.

“Athletic shoes and apparel have been hot and successful, too — look at Nike and Under Armour. I thought everyone that carried those products was able to ride the waves,” Mulpuru said. “It suggests that these guys ran out of cash and probably didn’t manage the business as well as they could have. They certainly were late movers to the Web.”

Oh. Yeah, who wants to look at and try on a piece of clothing to see if it fits before buying it.

In its filings, Vestis also said its attempt to move all three stores onto a common software program caused expensive headaches when the integration didn’t go as planned.


The software meltdown left warehouse workers scrambling to track inventory during the fall, slowing their processing work by up to 30 percent and requiring new night and weekend shifts to get the job done, Vestis said in its court filings.


No wonder they are bankrupt!

Eastern Mountain Sports was founded in 1967 by a pair of Wellesley climbers who later opened a climbing school. EMS grew steadily but was sold in 2012 to an affiliate of Versa, the private equity firm that controls the brand today. The chain “was on the brink of immediate liquidation just prior to its acquisition,” Vestis said in court filings.

Vestis affiliates bought Bob’s, a casual-apparel retailer, from TJX Cos. in 2008 and purchased Sports Chalet in 2014....

At least they had a good holiday season:

"One of the highest-paid chief executives in Massachusetts just got a little richer on her way out. Former TJX Cos. chief executive Carol Meyrowitz received shares of company stock valued at more than $10 million Tuesday, just days after officially stepping down as chief executive. A spokeswoman for TJX said Meyrowitz received a “performance-based restricted stock award” and will be chairman of TJX’s board of directors for three years. According to documents the company filed with the Securities and Exchange Commission, Meyrowitz received more than 140,000 shares of common stock valued at $72.86 when markets closed Tuesday. The award brings Meyrowitz’s total stock ownership to more than 500,000 shares valued at $36.4 million. Under Meyrowitz’s nine-year tenure, the off-price retailer’s market capitalization grew from about $13 billion to about $48 billion, among the highest in Massachusetts. Meyrowitz, 61, took home $28.7 million in total compensation in fiscal 2015. Meyrowitz is credited with making the Framingham-based company a recession-resistant powerhouse that has outpaced its peers year in and year out."

Time to exit.


Also seePacSun files for bankruptcy

"Nordstrom Inc. said Monday it will be cutting about 350 to 400 jobs as it looks to be more nimble at a time where shoppers are shifting their spending more online. The upscale department store, based in Seattle, says the cuts will be primarily in its corporate center and regional support teams. The process should be completed by the end of its fiscal second quarter. The changes will mean $60 million in savings for the current fiscal year. Nordstrom says that it’s first looking at closing unfilled open positions to minimize the impact on current employees. The changes come as Nordstrom, like other retailers, tries to integrate its physical stores with online services and improve its supply network. The layoffs follow job cuts by other retailers including Walmart and Macy's."

Good thing my government and its mouthpiece pre$$ are telling me the economy is fine; otherwise, I'd really be worried.