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Business of Fashion
20-05-2025
- Business
- Business of Fashion
With Financing Push, Saks Global Looks to Buy Some Time
Saks Global's liquidity crunch has come to a head. Amid mounting concerns about the department store operator's ability to meet an interest payment due next month, a group of bondholders who own a majority of the department store operator's $2.2 billion debt formed a group over the weekend to provide new financing, according to media reports. A potential deal could see the group renegotiate its standing relative to other creditors, such as a higher interest rate or priority in a bankruptcy, in exchange for providing additional liquidity, a form of financing known as a liability management exercise. The group hired Lazard Inc. and Paul Weiss Rifkind Wharton & Garrison as advisers on the potential new financing, Bloomberg reported Sunday. Along with another loan, Saks Global could secure over $500 million in total liquidity, according to Debtwire global head of credit research Tim Hynes. That should be enough for the company to cover the June interest payment and pay vendors through the holiday season. What the financing won't do is address Saks' increasingly precarious positioning in the fashion marketplace. The company's relationship with many brands has soured since its acquisition of rival Neiman Marcus, which closed in December. After months of complaints about late or missing payments for merchandise, Saks announced in February it would make vendors whole by mid-2026, and pay for new merchandise within 90 days. Unpaid supplier invoices reached $1.3 billion as of last August, according to Debtwire. The vendor repayment plan was too little, too late for some brands, which have scaled back on the amount of inventory they send Saks and Neiman Marcus. Others, including some of the biggest European luxury labels, have pulled out of Saks' stores entirely in recent years, part of a wider trend that has seen high-end brands prioritise their own sales channels. Saks' sales have slowed and its cash position has worsened. According to documents obtained by Debtwire, the retailer generated $7.3 billion in sales in the 12 months ending Feb. 3, down 17 percent year on year. In that same period, earnings before interest, taxes, depreciation and amortisation fell 30 percent. Saks' bond, which was issued in December, traded at 48 cents on the dollar on Monday, and its value has fallen sharply in recent weeks as concerns about the company's financial health have escalated. 'This is the company's final gasp for air,' said distressed assets expert and ProChain Capital president David Tawil, of the weekend negotiations with creditors. Saks Global executives have projected strength publicly even as they negotiate emergency financing behind the scenes. At the World Retail Congress in London last week, executive chairman Richard Baker said the company now controls 60 percent of luxury distribution in the US. He said the Neiman Marcus acquisition will save the combined company over $600 million a year as it lays off staff, closes stores and cuts other costs. The problem, however, as reflected in Saks' plummeting bond value, is that investors are sceptical of its ability to pay down debts. Credit rating agency S&P Global placed Saks Global on negative credit watch, a step before downgrading its current CCC+ rating. 'Saks Global is significantly ahead on savings,' the company told BoF in a statement Monday. What's more, Saks is facing a vendor exodus as it continues to struggle with payment for orders, which will further strain both sales and cash flow. Saks' first round of payments on past-due balances will begin in July. But the company appears to be wavering on its commitment to pay for new merchandise within 90 days. While some brands told The Business of Fashion they have received prompt payment, one New York label that shipped merchandise to Neiman Marcus in February said it was told by the retailer last week that it would be paid within 120 days, rather than 90. The falling bond price and refinancing negotiations are also shaking vendors' confidence. Another American label, reacting to the news about Saks' liquidity issues, has proactively cancelled its orders for summer and fall. At the World Retail Conference, Baker said Saks plans to 'edit out' 500 to 600 brands from its stores' selection. He added the priority now is to focus on private labels as well as brands in which it has a controlled interest via its partnership with Authentic Brands Group, which owns the intellectual property of Hervé Léger, Brooks Brothers, Nautica and more. The idea is that with fewer but stronger brand partnerships, Saks Global would also have a stronger grip on markdowns, which have plagued American luxury retail in recent years. The company also recently opened a storefront on Amazon, though it sells only a fraction of its brands there. 'Now with our new structure, we're able to delay promotions, which is going to give our brand partners the chance to have more full price selling in their own stores,' said Baker. 'If we do this right, less inventory, less vendors, more margin and less promotion is going to make the entire industry in the United States healthier.' Baker and Salter also outlined their ambitions in building real estate developments around the world, combining the Saks name recognition with luxury hospitality. Salter said there are six or seven projects already in the pipeline, with opportunities in the Middle East and Asia Pacific. It will take time to boost sales and generate enough cash to be a self-sustaining business again. That's why securing additional capital from the bondholder majority group and the prospective loan is so important, Hynes said. He said Saks is likely to secure new financing because it still has assets to put up as collateral, including its intellectual property and its Fifth Avenue flagship, which a 2024 appraisal valued at $3.6 billion. Even if those plans fall through, Saks may be too big and well known to fail. 'If the company doesn't get the additional financing, then they wind up filing for bankruptcy,' Hynes added. 'But the company will still be around. It'll reorganise. Saks won't just disappear.'
Yahoo
11-04-2025
- Business
- Yahoo
Iconic American beverage brand on brink of collapse amid series of setbacks: 'Cornucopia of challenges'
Shifting environmental conditions and plant diseases are posing a threat to the orange industry. Meanwhile, evolving consumer habits are reducing demand for orange juice, putting the iconic orange juice brand Tropicana in a tough spot, CNN reported. Tropicana has been dealing with sales and profit drops in recent years, and now it could be headed for bankruptcy. The company's revenue dropped by 4% last quarter, and income fell by 10%, according to Debtwire data cited by CNN. Tropicana is struggling with a "cornucopia of challenges," said Beverage Digest publisher Duane Stanford, per CNN. The company is facing financial difficulties amid a crisis in the orange juice industry. There are various factors hitting the orange juice industry hard. Rising temperatures, unpredictable weather conditions, and plant diseases like citrus greening are affecting orange production, leading to supply shortages and price hikes. For instance, Florida experienced a decline in orange production due to Hurricane Milton last year. Per CNN, a scientific analysis revealed that the storm was strengthened by the shifting weather patterns. The storm affected "probably 70% of the most productive citrus acreage" in the state, according to Florida Citrus Mutual CEO Matt Joyner. The industry is also affected by changing consumer habits. Consumers are now more mindful of their sugar intake and exploring other beverages like energy drinks, sparkling water, and teas. While there is less demand for orange juice, the industry is experiencing price hikes due to supply shortages. According to the Bureau of Labor Statistics, the average price of a 12-ounce orange juice bottle was $4.50 as of January, nearly double the price from January 2020, which was $2.30. The orange juice industry is worth billions of dollars, with its market size expected to be worth $7.29 billion by 2029, according to the Orange Juice Global Market Report 2025 by The Business Research Company. Its decline could lead to job losses, supply shortages, and price hikes. Beyond rising prices and job losses, the orange industry crisis also draws attention to the rising global temperatures, which make it difficult to grow oranges and other crops. According to the Environmental Protection Agency, agriculture relies heavily on water, soil, and other natural resources easily affected by climate. The warming climate could also affect the production of other crops, leading to supply shortages of other agricultural produce as well. Citrus greening disease significantly impacts orange production, and there is no cure for it, but researchers are exploring ways to prevent it. Scientists at the University of Florida are looking into genetically modifying citrus trees to make them resistant to it. Do you think America has a plastic waste problem? Definitely Only in some areas Not really I'm not sure Click your choice to see results and speak your mind. The best thing individuals can do is to explore critical climate issues and find ways to support sustainable farming, like supporting citrus research and buying sustainably grown oranges. These actions can make a big difference and help agriculture thrive amid the changing climate. Join our free newsletter for good news and useful tips, and don't miss this cool list of easy ways to help yourself while helping the planet.
CBC
25-03-2025
- Business
- CBC
What happens to your DNA data now that 23andMe has filed for bankruptcy?
Social Sharing The struggling genetic testing company 23andMe has filed for bankruptcy,, and its co-founder and CEO has resigned. Now, its millions of customers are wondering what happens to their genetic data — and whether it's secure. CBC News heard from readers this week who had concerns about the security of their data, how they can delete their personal information, and what new ownership could mean for them. We've tried to answer as many as we can. CBC News reached out to 23andMe. The company responded by pointing to its press release and its open letter to customers. First, what happened? San Francisco-based 23andMe announced on Sunday that it will look to sell "substantially all of its assets" through a court-approved reorganization plan. Co-founder Anne Wojcicki, who made multiple failed takeover bids, resigned as CEO. 23andMe did not say whether there are other interested bidders. 23andMe was founded in 2006, with a promise to revolutionize the future of genetics and health care. The company became known for its saliva-based DNA testing kits — purchased by millions of customers eager to learn more about their ancestry — and later dived further into health research and drug development. But it has faced an uncertain future for some time. Beyond battles to go private, the company struggled to find a profitable business model since going public in 2021. Then in 2023, hackers exposed the personal data of nearly seven million 23andMe customers over a five-month period, dealing a major blow to the company's reputation and compounding its growth problems. In November, the company laid off 40 per cent of its workforce. Proposed class-action lawsuit over 23andMe data breach 1 year ago Duration 1:57 Is the company still in business? Yes. 23andMe says it plans to continue operating. In an open letter to customers posted Sunday, the company wrote that "orders and subscriptions will continue as normal, and any purchases or genetic testing kits sent in for processing will be handled without disruption." 23andMe added that customers still have full access to their accounts, reports and stored data. OK. So what happens to my data now? Though the company's privacy policies say that the data could be sold to other firms, 23andMe says customer data will remain protected. In its recently updated privacy policies, the company writes that if it is involved in a bankruptcy, merger, acquisition, reorganization or sale of assets, "your Personal Information may be accessed, sold or transferred as part of that transaction and this Privacy Statement will apply to your Personal Information as transferred to the new entity." However, the company said the bankruptcy process will not affect how it stores, manages or protects customer data. Its open letter to customers stated that "any buyer of 23andMe will be required to comply with applicable law with respect to the treatment of customer data." John Bringardner, the executive editor of the newsletter Debtwire, notes that any new buyer of 23andMe will have to comply with regulatory approvals that ensure "customer data won't end up in unscrupulous hands." But Toronto lawyer and cybersecurity expert Brent Arnold said his concern is that when a company is going bankrupt, privacy issues and compliance are sometimes the last thing on their minds. "They're just thinking about getting through the restructuring, having the business survive," he told CBC. "So everything else becomes secondary, including properly protecting your data." Is my data safe? For those who are wondering, you're not alone. Officials, including California Attorney General Rob Bonta, had questioned what would happen to the genetic data collected by 23andMe. Last week, Bonta issued a consumer alert urging customers to delete their accounts. "Given 23andMe's reported financial distress, I remind Californians to consider invoking their rights and directing 23andMe to delete their data and destroy any samples of genetic material held by the company," he wrote Friday. On Tuesday, New York Attorney General Letitia James also encouraged customers to delete their accounts and secure their data, calling 23andMe's bankruptcy announcement "concerning." The Washington Post's tech columnist Geoffrey Fowler wrote Monday that "unless you take action, there is a risk your genetic information could end up in someone else's hands — and used in ways you had never considered." Who will end up owning 23andMe down the road is unknown, and experts note that risks remain. "Personal data collected by 23andme has always been at risk," Bringardner wrote in an emailed commentary to the Associated Press on Monday. He pointed to the 2023 data breach that compromised ancestral information for nearly seven million 23andMe customers. He adds that litigation spanning from the aftermath of this breach helped drive up liabilities that eventually contributed to the current bankruptcy filing. Arnold added that 23andMe may be particularly vulnerable to hackers right now. "They're probably not in as good a position to repel an attack as they would be when they were running with full funding." How could my data potentially be used? In November, when 23andMe announced it was laying off 40 per cent of its employees, University of Alberta professor Timothy Caulfield told CBC's The Current that there are "reasons to be concerned" about your personal data, especially given that not only have breaches happened in the past, but they could happen in the future — with any company. Caulfield, a Canada research chair in health law and policy, noted it's possible that if you were predisposed to genetic conditions, and someone found out, the information could potentially be used for "nefarious purposes." These nefarious purposes potentially could include discerning your relatives and ancestry, unearthing family secrets, or revealing clues about diseases you have or could be predisposed to, said Ginny Fahs, director of product research and development for Consumer Reports' Innovation Lab, in the Washington Post. "If the data makes its way to certain insurers, they may deny you coverage or charge you more for life, disability or long-term care insurance because of your genetics," Fahs said. There's also a risk that if the data is sold to a new company, they might want to use it in a different way, Fowler wrote in the Washington Post. He points to the company's privacy policy that says your data could be sold or transferred as part of a company transaction. What protections are in place? Earlier this month, researcher Sara Gerke, an associate professor of law at the University of Illinois, told the New England Journal of Medicine 's podcast that the U.S. doesn't have comprehensive data privacy laws and that "the entire system itself has a lot of weaknesses and doesn't protect consumers' privacy properly." However, bankruptcy laws can offer some protections to 23andMe customers, she added, especially given that it's a public process where regulators can step in or ombudsmen can investigate the sale. Still, there are weaknesses in the bankruptcy system, too, Gerke added. "And ultimately it does not necessarily stop the sale of customer data to the highest bidder." Arnold noted that, although Canadian customers will fall under Canadian privacy law, Canada hasn't had much luck in enforcing its privacy laws abroad. "The bottom line is this — you don't have much control over where [your data] is going." Can I delete my information? Yes, with caveats. Gerke said that people who are concerned can be proactive by deleting their accounts. However, she notes this only provides "partial relief" because if you've already consented for your data to be used for research that's already published or included in a dataset, that can't be retracted (On its account closure page, 23andMe notes that your information will not be used for any future research). Plus, 23andMe clearly states that even if you cancel your account, it "will retain limited information" about you. In its privacy statement, the company writes, "23andMe and/or our contracted genotyping laboratory will retain your Genetic Information, date of birth, and sex as required for compliance with applicable legal obligations ... even if you chose to delete your account." The company explains you can directly delete your account in your account settings. You can download your data to your personal device before deleting it.
The Guardian
17-03-2025
- Business
- The Guardian
Forever 21 files for bankruptcy again amid pressure from fast-fashion rivals
Forever 21's US operator on Sunday filed for bankruptcy for the second time in six years and said it would wind down operations in the country, hurt by mounting online competition in the fast-fashion sector and weak mall traffic. The company blamed the situation on higher costs and foreign companies taking advantage of duty-free treatment of low-cost packages from China to undermine its pricing power. 'We've been unable to find a sustainable path forward, given competition from foreign fast-fashion companies, which have been able to take advantage of the de minimis exemption to undercut our brand on pricing and margin,' said Brad Sell, finance chief at F21 OpCo that operates Forever 21's roughly 350 US stores. De minimis refers to the US waiver of standard customs procedures and tariffs on imported items worth less than $800 that are shipped to individuals and helps Chinese online retailers such as Shein and Temu to keep prices ultra-low. Donald Trump paused his administration's repeal of the clause as part of the fresh tariffs imposed on China in February. Founded in Los Angeles in 1984 by South Korean immigrants, Forever 21 was popular among young shoppers on the prowl for stylish but affordable clothing. By 2016, it operated around 800 stores globally, of which 500 were in the U.S. But, the rise of e-commerce retailers and the slow death of the American mega mall hurt apparel companies such as Forever 21 and Bonobos-parent Express, which filed for bankruptcy last year. 'Brick-and-mortar retailers like Forever 21 operate in a highly competitive environment where the cost of doing business is expensive and rising with inflation rates,' Sarah Foss, head of legal and restructuring at Debtwire, which provides data and analytics on leveraged loans. The retail sector saw 20 bankruptcy filings since the start of 2024, while 25 retail chains have had at least two bankruptcy filings since 2016, according to Debtwire data. F21 OpCo is planning for liquidation sales at its US stores, while it goes through a court-supervised sale and marketing process for its assets, which it estimated to be worth around $100m to $500m. Its US stores and website will remain open through the process and its international stores remain unaffected. It has liabilities in the range of $1bn to $10bn, according to a filing with bankruptcy court in the district of Delaware. Forever 21 previously filed for bankruptcy protection in 2019 and was bought out of it by Sparc Group, a joint venture between label owner Authentic Brands Group and mall operators Simon Property and Brookfield Asset Management. It is now owned by Catalyst Brands, an entity formed on 8 January through the merger of Sparc and JC Penney, a department store chain owned since 2020 by mall operators and Simon Property Group. When Catalyst Brands was formed, it said it was 'exploring strategic options' for Forever 21. Authentic Brands will continue to own Forever 21's trademark and intellectual property, which could live on in some form. Its CEO Jamie Salter last year called acquiring Forever 21 'the biggest mistake I made'.
CNN
26-02-2025
- Business
- CNN
Tropicana is in big financial trouble
Florida has been blasted with stronger hurricanes than ever before. A prolific disease carried by insects continues to devastate orange groves. And, on top of all that, consumers are watching their sugar intake. It's adding up to a disaster for Tropicana orange juice. Tropicana, founded in 1947 by an immigrant from Sicily who developed a process for freezing concentrated orange juice, is in financial distress and could be headed for bankruptcy. Tropicana Brands Group, which owns Tropicana, Naked, KeVita and other juice drinks, has seen sales and profit deteriorate in recent years. The company's revenue slipped 4% last quarter and its income dropped 10%, according to Debtwire, a financial services publication. Actions from its owners paint a much more dire picture. PAI Partners, a European private equity firm that took a controlling ownership stake in the company four years ago from PepsiCo, recently provided a $30 million emergency loan to Tropicana, 'showing that they are a lender of last resort,' and are 'not confident any value remains from their initial investment,' said Tim Hynes, the head of credit research at Debtwire. PepsiCo, which still owns a minority stake in the company, also said that it wrote down the value of its investment by $135 million last quarter. 'Tropicana's financial difficulties have raised concerns about how the company will manage its balance sheet,' Hynes said. 'Tropicana faces an uphill battle.' Tropicana and PAI Partners did not respond to CNN's requests for comment. Supply shortages in top orange-growing areas — worsened by climate change-influenced disasters like more severe hurricanes in Florida and intense droughts in Brazil — plus higher prices, competition and changes in Americans' diets have hammered Tropicana. The Department of Agriculture expects this year's orange production to be the lowest in 88 years. Orange production has become so tough that Alico, a major supplier to Tropicana, ended its citrus-growing operations. The company said last month that 'growing citrus is no longer economically viable for us in Florida,' with disease and hurricanes reducing its production by 73% over the last decade. Consumer trends have also hurt OJ. Customers are replacing orange juice with teas, sparkling water, sports drinks, energy drinks and other beverages that claim to be healthier or offer functional benefits like improved immune systems or energy levels, analysts say. Within the orange juice market, Tropicana is getting squeezed on the lower end by Coca-Cola's cheaper Minute Maid brand and the higher end by Simply, which has similar prices to Tropicana's and is grabbing consumers willing to pay more for orange juice, said Duane Stanford, the publisher of Beverage Digest. Tropicana is facing a 'cornucopia of challenges,' he said. Hurricane Milton battered Florida last year with deadly tornadoes, historic rain and high winds — and the storm was supercharged by climate change, according to a scientific analysis. It also devastated Florida's orange industry. Florida accounts for the majority of the oranges produced in the United States. 'Milton came across the center of the state and really impacted probably 70% of the most productive citrus acreage in Florida,' Matt Joyner, CEO of Florida Citrus Mutual, an advocacy group for growers, said last year. And it's not just atmospheric disasters that have devastated the industry. Orange production in the United States has declined in recent years due to the spread of citrus greening disease, a bacterial infection that cuts off key nutrients to orange trees, which first hit Florida in 2005. Trees infected with the disease produce fewer, lower-quality oranges and eventually die. Orange production in the United States was forecast to drop 10% in 2024 to 2.2 million tons due to weather and disease problems, especially citrus greening in Florida, according to the USDA. Production in Florida was forecast to drop 33%, while production in California was expected to drop 1%. Even as people have stopped buying as much orange juice, supply issues have led OJ prices to soar regardless. Orange juice prices have nearly doubled compared to 2020, reaching record highs in late 2024. The average price of a 12-ounce bottle of orange juice was $4.50 in January, up from $2.30 in January 2020, according to the Bureau of Labor Statistics. And those high prices are turning off customers even more, said Stephanie Mattucci, an analyst at market research company Mintel. Only 19% of US consumers think orange juice is a good value, according to a Mintel survey of 2,000 consumers in April for a report on juice drinks. Rising orange juice prices have come as prices on other foods, such as eggs, have surged. Customers at dollar stores are abandoning orange juice more quickly than shoppers at grocery stores, warehouse club stores and big-box chains, said Chris Costagli, a vice president and the food insights lead at market research firm NIQ. Dollar stores typically cater to lower-income customers, and the pullback there is a sign that the most price-sensitive shoppers are dropping orange juice, he said. Recently, rather than raising prices, Tropicana tried to address rising costs by shrinking its bottle. But the move backfired. Tropicana ditched its distinctive carafe, with its circular shape, thinning neck, and crown-like bottle cap. Over the summer, it rolled out a more traditional-looking plastic bottle and downsized the bottle from 52 ounces to 46 ounces. Tropicana also narrowed the label to fit the more compact bottle. OJ fans were frustrated about the new look and protested that Tropicana was ripping them off by selling smaller bottles. Tropicana told CNN at the time that the company changed the bottle to address feedback from customers, including making it easier to pour and store while reducing plastic in the cap. Consumers' changing ideas of health have also hurt orange juice and other fruit juice, which are relatively high in sugar and calories. Today, fresh-pressed green juices, enhanced water and protein-packed beverages are considered healthier than OJ. Conscious of changing tastes, Tropicana has attempted to stay ahead. In 2023, Tropicana launched a zero-sugar line. Tropicana also released limited-edition bottles without the letters 'A' and 'I' in its name ('Tropcn') to bring attention to its natural ingredients. The marketing stunt was aimed at highlighting the 'fact that there is nothing artificial, and never has been anything artificial' in the brand's orange juice. Tropicana is also shifting into faster-growing drinks. Last year, the company introduced Tropicana Refreshers, a line of non-orange juice drinks, and a line of sparkling drinks. But Tropicana's brand is synonymous with orange juice. Shifting customers' association with Tropicana after nearly 80 years is difficult, said Stanford from Beverage Digest. 'When so much of your business is focused around 100% orange juice, it takes some time to diversify.'
