💥This Party Sucks💥
Are we looking at another retail chapter 22 (and liquidation)?
In today’s edition, we (i) revisit with two old friends, (ii) discuss a potential distressed situation, (iii) update coverage on Exactech Inc., and (iv) cover Vobev LLC’s chapter 11 bankruptcy filing (with an emphasis on BDC mark treatment). Let’s dig in ⬇️.
💩How’s Brick-and-Mortar Retail Doing?💩
We noted struggles among The Container Store, Joann and The Children’s Place ($PLCE) on Wednesday …
… but they sure don’t have a monopoly on brick-and-mortar suckery.
News broke this week that Party City might be on the verge of a Chapter 22 (“The New Jersey-based retailer, which sells balloons and other party supplies, is behind on rent at some locations and running out of cash…”). Say it ain’t so, balloon purveyor extraordinaire with an inexplicable 800+ locations! We were now-minus-14-months-younger when we first saw this language loud and proud on the company’s bankruptcy website:
Ok, folks, so we went and looked up “future” and — to be fair to Party City and all of the professionals involved (e.g., Paul Weiss + AlixPartners) who now appear to be in position for the good ol’ fashioned and seemingly more-frequent-than-ever company-side “double dip” — it is defined by Oxford as “the time or a period of time following the moment of speaking or writing; time regarded as still to come.” It seems the “period of time” was unfortunately rather — “reportedly” of course (😜) — short. It also seems this will prove to be rather accurate:
You know what won’t prove to be accurate? This 👇:
Whoa man. For a pessimistic-as-all-hell-doom-and-gloom set of people who bemoan their existences on the regular (“living the dream” is a common industry refrain), we sure do find a way to exude optimism in the strangest of ways, don’t we? Like those projections, LOL. Look at that YOY sales growth projection.
And those retail store comp projections.
That ascending gross margin.
That transformational operating income.
Or that EBITDA … make it stop please!
We’re not done. There’s this 👇 too:
Stockholder’s equity?
Who knew RX bankers were so damn funny?
More questions: does anyone at Silverpoint Capital know anything about whippets? Maybe that can save the business?