It’s estimated that roughly 25 percent of America’s malls will close in the next five years—established retailers such as Macy’s and Sears have announced multiple store closings, while others like American Apparel and Wet Seal have filed for bankruptcy. More closings and bankruptcies are likely on the way, and the number of retail companies that have filed for Chapter 11 bankruptcy is approaching its highest level since 2008.
In his Daily Journal article “Legal Strategies to Help Retailers in This Difficult Environment,” and in his Bloomberg BNA article “The Retail Meltdown – How You Can Help Your Brick-and-Mortar Clients Thrive,” Jeffrey Pomerance, the head of the Transactional Practice for SulmeyerKupetz, outlined legal tactics that attorneys representing retailers can consider to help their clients weather the storm. These strategies include revisiting supplier contracts, lease terms and the company’s capital structure, as well as exploring opportunities to create additional value through the retailer’s intellectual property.
Pomerance concluded the article by noting that attorneys representing retail clients can and should be actively engaged in the process of developing proactive strategies to conserve cash and increase revenue. “This additional runway can often permit the brick-and-mortar retailers to implement business and inventory control strategies to survive and indeed succeed in this otherwise difficult retail market,” he wrote.
