☄️Future First Day Declaration: Forever21☄️

coked out cheetah.gif

We figured we'd take the first crack at the First Day Declaration for Forever21 Inc.'s potential bankruptcy* and spare the company some professional fees.

"Preliminary Statement in Support of Forever21's Chapter 11 Petition"

As you know, retail sucks. The list of bankrupted retailers is long and “iconic” and so we got FOMO and decided, what the heck! Everyone’s failing, so we might as well also!

But first, we did want to make sure that we could explain to our uber-loyal fanbase (who clearly isn’t buying enough of our sh*t) that we did everything in our power to stay out of bankruptcy court. And so we did what all retailers today do: we focused on omni-channel; upped our Insta spend; updated the lighting in our stores and refurbished our “look”; stretched our vendors; sh*tcanned some employees; negotiated extensively with our landlords; closed a few underperforming locations; negotiated with our lenders, and more! According to Bloombergwe’ve hired Latham & Watkins LLP to deal with this hot mess, including our $500mm asset-backed loan. We’ve been busy bees!!

We had one Hail Mary trick up our sleeves that we thought would really save the business: partnerships. With first class brands. Like Cheetos. That’s right Cheetos!! GET PUMPED!!! Everything is so 🔥🔥🔥.


This sh*t got ~45k likes (“worst things since the Kardashians!” haha). Which pales compared to this doozy, which got ~47k likes:


This is the most ridiculous clothing line I’ve ever seen.

Nothing drives sales sales sales like thoughts of “ball cheese” (PETITION Note: sorry…we had to). #Fail.

But, wait! There’s more. We brought back Baby Phat too!!

May G-d have mercy on all of us.

*Sources tell us that the company may not be as close to a bankruptcy filing as some previous media reporting implied. Nevertheless, the name has been kicking around for some time now within the lender community and it does appear that the company is focused on some operational fixes. This “mock” first day declaration should not be construed as indicating that a bankruptcy is, in fact, imminent.

'16 Q4 in Review

'16 Q4 in Review

Hopefully the industry can coast through the end of 2016 sans any emergency bankruptcy filings that destroy people's holidays. Last year, Swift Energy set the tone for 2016 with a New Year's Eve filing: we're sure the good folks at Jones Day LLP enjoyed the heck out of that. 

This past quarter saw a significant amount of activity among the usual sectors:

  • Consumer Products/Retail (Gracious Home, Roust Corporation, American Apparel, Jo-Jo Holdings Inc., Nasty Gal, Garden Fresh, Cosi)
  • Exploration & Production/Oil Field Services (Stone Energy, Northstar Energy, Erickson Inc., Shoreline Energy, Enquest, Basic Energy, American Gilsonite, Key Energy, Tervita, Connect Transport)
  • Metals & Mining (Optima Steel, Emeco, Rubicon)
  • Power (Illinois Power, La Paloma)
  • Telecom/Media/Technology (Violin Memory, Scout Media, Choxi.com, Limitless Mobile, DirectBuy Holdings, Implant Sciences, Filip Technologies)

We spent much of the quarter focused on the food and retail space, whether it was addressing the implications of Amazon Go, the increasingly crowded and commoditized grocer space, noting the disaster that is the Chapter 22 filing of American Apparel, or querying (pre-election) whether progressive policies were destroying restaurants. We also discussed, in the wake of the Paragon Offshore decision, whether the industry has a feasibility problem and got some community feedback as to what the election of Donald Trump means for the industry. In other words, we've been busy.

Most professionals seem to think that many of the aforementioned industries will see continued distress in 2017 - with a number of previously-deemed potential 2017 hot spots having recovered nicely from the Trump bump, i.e., for-profit education, for-profit prisons, biotech/pharma, defense...to name a few. And many expect most of the same questions and themes we've covered to continue to be relevant. Time will tell. 

The following firms killed it in the fourth quarter and hereby win PETITION's first ever quarterly kudos:

  • Legal (tied):
    • Latham & Watkins LLP (Optima Steel, Stone Energy, Illinois Power, Key Energy, Tervita)
    • Weil (Violin Memory, DirectBuy, Performance Sports Group, Basic Energy, American Gilsonite). Weil was the subject of a feature piece a few weeks back.
  • Financial Advisor/Investment Banker:
    • Houlihan Lokey (Violin Memory, Roust Corporation, American Apparel, Erickston Inc., Catalyst Paper, Emeco, American Gilsonite, Key Energy, Tervita Corporation, Connect Transport)
  • Claims Agent:
    • Prime Clerk (Northstar Offshore Group, Violin Memory Inc., Gracious Home LLC, DirectBuy Holdings Inc., Shoreline Energy LLC, American Apparel LLC, Transtar Holdings Company, Channel Technologies Group LLC, Performance Sports Group)

We'll be sure to watch closely for what 2017 has in store for us. We suspect more pain in the oil field services space, a post-holiday crush of (brick-and-mortar) retail spirits, and more advanced technological disruption of incumbent companies (and failure of "tech" companies). The same firms are likely to be just as busy in 2017 as they were in 2016. The only real mystery is who will be on the receiving end of Judge Jones' next big dress down...? 

As we (hopefully) jump from the beta test phase of our weekly curated newsletter (and corresponding website, where stories post on delay to the newsletter) to a more robust product and community, we ask for your assistance: please encourage your colleagues, peers and friends to subscribe HERE. The more people that are part of the community the more we'll collectively get out of it. 

Most importantly, PETITION wishes you a happy, healthy and safe new year. PETITION is out until 2017. Peace.