👕New Chapter 11 Bankruptcy Filing - iMedia Brands Inc. ($IMBI)👕
Media commerce business seeks sale in bankruptcy.
“Cash is critical to the Debtors’ business enterprise, which consists of a broad-based portfolio of entertainment, consumer brands, and media commerce services businesses.” — James Alt, Chief Transformation Officer of iMedia Brands Inc.
You don’t say.
On June 28, 2023, MN-based and publicly-traded iMedia Brands Inc. ($IMBI) and 11 affiliates (together, the “debtors”) filed chapter 11 bankruptcy cases in the District of Delaware (Judge Owens).
This company is about as hodge-podgey a hodgepodge as you can find. The debtors consist of a portfolio of entertainment (Shop HQ, a shopping network + 1-2-3.tv, a non-debtor German interactive media company), consumer brands (Christopher & Banks and J.W. Hulme Company), and media commerce businesses (iMedia Digital Services),1 “…each of which cross promotes and exchanges data with each other to optimize the engagement experiences it creates for advertisers and consumers in the United States and Western Europe.”
The entertainment segment is the alleged crown jewel; it generates nearly 84% of the company’s total revenue, which, to be fair, wasn’t a shabby amount. In FY’22, the company’s consolidated net sales for the segment were $455.7mm. Not bad! Unfortunately, that represented a $23.2mm ⬇️ from FY’21. Bad! Even worse, the segment suffered an operating loss of $101.9mm in FY’22, a cliff dive compared to a more modest $13.5mm loss in FY’21.
The consumer brands segment is much smaller than the entertainment and while its FY’22 sales represented a ⬇️ of $1.6mm from FY’21, it generated $8.8mm of operating income in FY’22, a big increase off of $2.6mm in FY’21. Must be the power of the Christopher & Banks acquisition out of its ‘21-vintage bankruptcy2 plus the “iconic” status of J.W. Hulme Company (like huh?, lol)!
Finally, the iMedia Digital Services segment constitutes a digital advertising platform that engages shopping enthusiasts online and in over-the-top marketplaces like on Roku, Fire TV, Apple TV, and other venues. This segment is the company’s highest (sales) growth segment with $46.2mm in sales in FY’22 vs. $27.8m in FY’21. Operating income was $4.9mm against $2.6mm in FY’21.
So, napkin math: ($101.9mm) + $8.8mm + $4.9mm = (💩).