Bankruptcy consultant on the lasting scars of coronavirus on retail sector

Some of the country's biggest retailers are filing for bankruptcy as the coronavirus pandemic decimates the industry. So far. J. Crew and Neiman Marcus have filed for Chapter 11 protection, and many other consumer names are on the brink. Mo Meghji, founder of M-III Partners, a New York-based consultancy firm focused on financially distressed companies, joins "Squawk Box" to discuss.
Neiman Marcus, saddled with debt and hit by the coronavirus pandemic, filed for bankruptcy on Thursday with a deal to hand its business over to its creditors.
The luxury department store chain had been struggling with competition from online rivals and dwindling cash before the outbreak. The health crisis exacerbated its problems, forcing it to furlough most of its 14,000 workers and close its 43 Neiman Marcus stores.
It is now the second major retailer to declare bankruptcy during the pandemic, following J. Crew’s filing earlier this week. It is likely not the last. J.C. Penney has also been exploring filing for bankruptcy. Many others are likewise forced to cope with sales that have been cut off and uncertainty over how people will shop in the future.
“Like most businesses today, we are facing unprecedented disruption caused by the COVID-19 pandemic, which has placed inexorable pressure on our business,” CEO Geoffroy van Raemdonck said in a statement.
“The binding agreement from our creditors gives us additional liquidity to operate the business during the pandemic and the financial flexibility to accelerate our transformation. We will emerge a far stronger company.”
Neiman Marcus said it has secured $675 million in financing from its creditors to fund operations through bankruptcy. Those creditors have also committed to a $750 million financing package that would fully refinance that financing and provide additional liquidity for the business once it exits bankruptcy.
It expects to emerge from bankruptcy this fall, at which point its creditors will become majority owners of the business.
The bankruptcy filing will help it eliminate roughly $4 billion in debt that remains as a memento from its sale to private equity firms Ares Management and the Canada Pension Plan Investment Board in 2013.
The retailer said Thursday that it has extended temporary closures of some Neiman Marcus, Bergdorf Goodman and Last Call stores through May 31. Starting this week its stores in Atlanta and the NorthPark mall in Dallas are available to customers by private appointment.
Neiman Marcus has long been known for its upscale brand and strong customer service. Its holiday catalog, known as The Christmas Book, first hit mailboxes and doorsteps in 1939, cementing the retailer’s place in many wealthy Americans’ homes.
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[@willpareto]

I really like Becky Quick, she is classy.

[@marekkolenda1514]

It's global depression not recession right now.

[@felipesilvamoldes1107]

not in China

[@marekkolenda1514]

Felipe Silva Moldes According to CCP communist propaganda

[@caroldavis9970]

Retail stores have been slowly losing before the virus.

[@marleyjanim5033]

Compensatory concepts
To eliminate unemployment
Restrure 40 hour work week &
Implement 3.5 day work week
2 shifts
10 hour day
3.5 day out of one week
10 hours Sunday - Tuesday
.5 or 1/2 days on Wednesday
10 hours Thursday - Saturday
4 shifts
24/7 day business
12 hour day
3.5 day out of the week

[@Yuchub33]

Am I the only one who never liked malls in the first place? You always get this sense that you have to spend to be there in some way or another, they barely have sitting spaces and dont get me started with outdoor outlets... Same crap but without AC

[@marekkolenda1514]

Bankruptcy corporation or personal could be near unemployment level after coronavirs epidemic.

[@marekkolenda1514]

Bet on negative intrest rates for treasury bonds.

[@brigadiergeneral2399]

Be fearful when others are greedy, be greedy when others are fearful. Warren Buffet.

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Da Brigadier General and he got rekt with his airline trades

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[@Radnally]

No recovery for you

[@greetingsearthlingsmynamei6393]

Just print more money. Problem solved.

[@paulholterhaus7084]

Yes, Just print til We can fill wheelbarrows with it....IE..Germany post WW 1

[@placitas52]

This is all money that will be paid back in the future or major inflation.

[@edrader]

debt keeps increasing. how will it be paid back?

[@russfolts4531]

Ask jesus to be forgiven.

[@edrader]

for what