Retail and Distribution
A proven track record is the best way to demonstrate our strength and depth of expertise. Below are examples of our team’s recent appointments.
Zalis was asked to advise SaarLB, a German bank, on a potential transaction to convert into equity the debt issued to a private equity fund and secured by a pledge on a shopping centre in the Paris region, giving it a controlling stake in the shopping centre.
With a an occupancy rate that had dropped to 76% with 12 out of 50 units vacant and several more under notice, a reduced footfall and a damaged reputation the value of the shopping centre had plummeted. After several failed attempts to sell the asset the owner had entered into a voluntary court bankruptcy procedure in order to negotiate an exit from the property under which the lender would take possession of the asset. The bank’s debt had by now an extremely high risk profile and the loan was transferred to the bank’s Special Situations group who asked Zalis to conduct a commercial study on the current situation of the shopping centre and to draw up a potential turnaround plan.
The Zalis study concluded that the shopping centre had sufficient advantages and potential (reasonable catchment area, good motorway access, the right flagship tenant, etc.) to succeed.
Zalis proposed a viable turnaround plan to revitalise the shopping centre, improve its performance and increase its value, but this plan would have taken two years to bear full fruit and it depended on a significant level of change (rent reductions, more appropriate tenants, etc.).
As a result the bank then decided to seek a buyer for its debt rather than exercise its option to take ownership of the property.
Farber accomplished the liquidation of Movie Gallery’s video and game rental business that operated approximately 181 retail stores across Canada, with more than 1,200 employees.
Farber acted as Trustee in a Proposal that was filed under the Bankruptcy & Insolvency Act (“BIA Proposal”) which was run in conjunction with Chapter 11 proceedings in the US. Bondholders in the US were contemplating “walking away” from Canada as they perceived immaterial value. However, the Canadian liquidation was executed exceedingly well and resulted in the Canadian creditors receiving 100 cents on the dollar.
As a result, he US parent company received full repayment of its secured loans and a repatriation of equity.
Minute Muffler/Speedy Muffler
Minute Muffler operated as franchisor and buying group to a chain of 91 Minute Muffler franchisees across Canada, specializing in “while you wait” automotive services for cars and light trucks.
Farber was the Court Authorized Sale Agent, working in tandem with the Receiver to maximize value for the secured lenders. There were serious concerns about the Receiver’s ability to keep the franchise network intact.
Farber successfully managed an accelerated sales process to maximize the value of the franchise network before it became severely compromised.
Clothing for Modern Times ("CMT")
CMT designed, produced and marketed trendy apparel styles for “fashion forward” men and women under the retail banners: Urban Behavior, Costa Blanca and Costa Blanca X.
They operated 116 leased store locations throughout Canada and had approximately 1,682 employees.
First under a BIA Proposal and then under CCAA, with Farber acting as Proposal Trustee and Monitor, CMT downsized the chain around its profitable stores and brands; self-liquidated inventory at certain locations; and ultimately, Farber sold the assets as a going concern in two separate transactions.
Tall Girl Shop
Tall Girl Shop operated a specialty retail clothing chain serving the needs of tall women with 14 stores in Canada and 17 stores in the US.
Tall Girl had identified a strategic purchaser from the UK that was interested in acquiring its assets as a means of expanding into North America.
Farber acted as Proposal Trustee and ran a Court-authorized sales process, which resulted in a favourable deal being struck with the UK-based purchaser for the Canadian operations, IP, and online assets. Key retail locations were maintained and others disclaimed. Jobs were preserved for approximately 100 Canadian employees.
Farber maximized the value of US assets by way of a Court-authorized liquidation of the US inventory and fixtures, which necessitated recognition of the Canadian proceedings under Chapter 15 of the US Bankruptcy Code.
Tabi operated a retail clothing store chain with 107 leased locations in malls in all Canadian provinces, except Québec, selling women’s clothing and related accessories. Tabi employed approximately 1,300 employees.
In January 2010, Farber acted as Trustee under a BIA Proposal. This resulted in the company restructuring its balance sheet. About one year later, despite the efforts of its Chief Restructuring Officer, Tabi continued to underperform. The private secured lender/equity withdrew their financial support to the company, necessitating a second, urgent filing under the BIA.
The ensuing liquidation of inventory, fixtures and IP assets at the remaining 70 retail locations maximized recoveries to the secured lenders.
Administration of Mostyn's, a curtain and soft furnishing retailer that has been trading since 1950 and has an annual turnover of £7m. The company employed 128 staff at its 35 retail outlets and 59 at its head office and manufacturing operation.
Despite a good reputation and solid underlying business and sales, difficult trading conditions together with the costs of dealing with certain historical problems, including onerous property leases, has resulted in the company being put into Administration.
Our team managed to sell the company, preserving the business as a going concern and safeguarding the majority of jobs.
Administration and pre-pack sale of Shakeaway, a national milk shake bar chain with 55 owned and franchised stores across the UK and overseas.
This is a £4.6 million turnover business that faced a number of challenges dues to the economic downturn, decline in the retail market and lack of available equity investment.
This resulted in the business being restructured via an immediate sale out of Administration to lose loss making outlets.
President Stores CC
President Stores had traded for over fifty years as a high-end ladies fashion retailer, but as a result of reduced sales, poor credit and declining profit margins, they experienced financial difficulties and commenced with Business Rescue proceedings.
Unprofitable stores were closed, and various stores were sold, as well as initiating and intensive debt collection process.
The outcome was that secured creditors were paid in full, and a successful business rescue was achieved.
Matuson & Associates received the Turnaround Management Association of South Africa runner up award in the small to medium Business Rescue category in 2014 for this successful Business Rescue.
Look & Listen Group (Pty) Ltd
This retail entertainment company was placed in Business Rescue, primarily due to a depressed economic climate, specifically within discretionary retail product categories such as music, gaming and movies.
As a result of the majority of the 25 stores no longer trading profitably, leases were cancelled or renegotiated and the head office was relocated, thereby decreasing monthly fixed costs. Retrenchment of staff and where possible voluntary retrenchment agreements were entered into with full severance being paid, and inventory was consolidated.
To make the Plan attractive to ensure its successful adoption and implementation, a cash contribution was secured from the shareholder.
This successful restructuring allowed the company to continue to exist on a solvent basis. Creditors received a higher dividend than they would have received in the event of liquidation and approximately 240 jobs were saved.