Lucky Brand files for bankruptcy, may be bought for $140M – Seeking Alpha

Lucky Brand is the latest casualty in retail.

The denim and fashion retailer filed for bankruptcy protection Friday, citing difficulties from the Covid-19 pandemic and the secular shift from brick-and-mortar, the Associated Press reported.

Among suitors for the distressed retailer is Simon Property (NYSE:SPG) affiliated entity SPARC Group, which, according to the restructuring officer, may buy the firm for $140.1 million in cash and more than $55 million in credit. Simon Property also happens to be one of Lucky’s primary landlords. SPARC operates other mall-heavy brands like Aeropostale and Nautica.

Lucky will close 13 stores, with more likely to come. It operates more than 200.

Deal closing is expected in August, with a backup transaction waiting should the SPARC deal fail to materialize.

The bankruptcy filing adds to the growing difficulties in retail-exposed and liquidity-constrained names. Filings were up 26% y/y in the 1H of 2020, according to Epiq Systems, and included J.C. Penney (OTCPK:JCPNQ), Hertz (NYSE:HTZ), Chesapeake Energy (OTCPK:CHKAQ), Quorum Health (NYSE:QHC), Pier 1 Imports (OTCPK:PIRRQ), Frontier Communications (NASDAQ:FTR), 24 Hour Fitness, J. Crew, and CEC Entertainment, the parent company of Chuck E. Cheese.

A large franchisee of Yum Brands (NYSE:YUM) and Wendy’s (NASDAQ:WEN), NPC International, filed for bankruptcy protection earlier this week. 

In other retail developments, Barron’s mentioned Sally Beauty (NYSE:SBH) and Michaels (NASDAQ:MIK) among stocks that could benefit if anything goes right, given their “unloved” status.