REIT CEOs Continue to BS Us All

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In our ongoing quest to call bullsh*t on Simon Property Group's David Simon, we noted back in May that Starbucks' ($SBUX) disappointing Teavana franchise exposes Simon Property Group ($SPG) to vacancy risk. As of last quarter, there were 78 Teavana locations in Simon Property Group malls. Well, now they are ALL closing. Sadly, this may affect over 3000 jobs.

Bebe Store Program = Closed. Bebe Influencer Program = Open

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Bebe Stores Inc. barely avoided a bankruptcy and managed to simply close its stores and go full-on e-comm. It helped that it didn't have any non-trade debt. Now, it's back. And it's deploying "influencer" marketing to jumpstart its next chapter. As we all know from things like the Fyre Festival, only good things come from influencer marketing. G-d help us all. 

Discounted Balls: Sports Retailers Getting Crushed

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We had previously warned that the pain trickling through the sporting goods retail space - combined with Nike's new efforts to go B2C via Amazon and otherwise - will hurt the Foot Lockers ($FL), Dick's Sporting Goods ($DKS), and Hibbett Sports ($HIBB) of the world. Well, we should have put our money where our mouth is: Hibbett Sports Inc. reported that it was going to miss its Q2 numbers BADLY with same store sales tumbling 10%. But, at least they've got a fancy new e-comm site up (with a lot of sale action going on).

Nordstom Going Private?

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Saving Private Nordstrom

Nordstrom ($JWN) is reportedly exploring a (debt-laden) take-private transaction in partnership with one or all ofLeonard Green & Partners LP, Apollo Global Management LLC and KKR & Co. LLP. The market, broadly, is exploring shorting the bloody hell out of retail generally, and Nordstrom specifically.

GNC Holdings Inc. Needs Some Protein Powder

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GNC is in Trouble

GNC Holdings Inc. ($GNC) remains in focus as it reported its Q2 numbers this past Thursday. In summary, decreased consolidated revenue, decreased domestic (company-owned and franchised) same-store sales, decreased net income and operating income, decreased manufacturing/wholesale business...basically a hot mess. Limited bright spots included China sales and the new GNC storefront on Amazon. You read that right: the storefront on Amazon. Ugh. The company has $52mm of cash, $163.1mm available under its revolver and a robust $1.5b of long-term debt on its balance sheet. The stock traded down 7% after the announcement (but was up on the week).

Go F*ck Yourself, Amazon

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The Claws are Starting to Come Out

More or less the gist of this letter from Birkenstock Americas CEO, David Kahan. We're sure many a bankrupt retailer shares in his sentiments about the purportedly shady shenanigans practiced by the behemoth e-retailer. Speaking of distressed retail, Aerosoles Group, the NJ-based women's shoe retailer with 80 US-based locations is reportedly exploring strategic alternatives. Per Reuters,Piper Jaffray Companies ($PJC) and Berkeley Research Group have been hired to help the company assess its options. 

Contura Energy = Latest Post-Reorg Equity

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Contura Energy, f/k/a Alpha Natural Resources, filed its S-1 Registration Statement today looking to price an IPO of 6mm shares at somewhere between $23-27. We've noted the recent post-reorg equity bloodbath that has transpired in the energy space of late. Perhaps Contura can buck the trend. Unrelated, Peabody Energy ($BTU) traded up 2+% today. 

Gawker.com Can Be Yours!

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Distressed Intellectual Property as Stocking Stuffer

Just what we always wanted: defunct intellectual property of one of the original prolific internet trolls. This Wall Street Journal piece notes that the brand, domain name, and social media accounts of Gawker.com will be up for sale shortly in order to provide a potential buyer an opportunity to develop a plan prior to the March 2018 termination of the post-sale publication restriction. Man, we crushed that run-on sentence. Anyway, the article also serves as (i) a solid marketing piece for Opportune-cum-Dacarba and (ii) a call-to-action for bankers to kiss-up to Opportune-cum-Dacarba. Well played. Seriously. Well played.

Lots of Distressed Fund Activity

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Distressed Funds Are Raising a Lot of Dough

Castlelake announced that it closed - in a swift four-month fundraising push - its latest fund at $2.4b. The fund will focus on global aviation and distressed assets in North America and Europe. Glendon Capital is targeting a $2b distressed debt fund. Elsewhere in distressed, there ain't much to do other thantout your own successful 2016 a la RBC Global Asset Management's PH&N Absolute Return Fund (quite a mouthful). And, in the case of Katy Industries, where Victory Park Capital Advisors LLC and Highview Capital LLC credit bid their "secured debt" to take ownership of the company, the official committee of unsecured creditors is looking to extort...uh...unwind the transaction on the basis that the secured debt is better characterized as an equity investment. If that's the case, the credit bid would presumably be invalid and the funds would need to cough up actual cash value for the assets. Hard to know for sure given the redacted pleadings. Bankruptcy is all about transparency except for those instances where it is all about anything other than transparency. Speaking of transparency, here are the funds holding COFINA bonds in the Puerto Rico matter.

Post-Reorg Equities, Oncor, & Elliott Management

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Paul Singer is Keeping Busy

We've previously discussed post-reorg equities here, noting the mild rollercoaster that Peabody Energy ($BTU) equity has been on post-emergence. This week Elliott International Inc. filed a 13-D highlighting increased ownership in the stock. Speaking of Elliott, the firm received additional time to further consider its bid for the Oncor assets it is purportedly competing withBerkshire Hathaway for. Here (video), Elliott's Paul Singer clowns on the value of Trump bonds. Elsewhere, a lot of bonuses just got flushed down the toilet as Basic Energy Services ($BAS) reported earnings and the stock promptly traded down nearly 20%. Management resorted to boring tropes about the weather and holidays affecting revenue.

Amazon Relentlessly Investing to Crush Other Retail

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Amazon ($AMZN) reported earnings earlier this week and while the market didn't respond favorably to what it heard, Amazon's revenue generating machine is undeniable. The issue was profits. To wit, this chart, clearly demonstrates that Amazon is selling, selling selling and then investing, investing, investing. In what? Crushing everyone else, obviously.