Century 21 files for Chapter 11 blaming insurers

BY Fraser Tennant    

Pointing the blame at its insurers, US department store chain Century 21 has filed for Chapter 11 bankruptcy in order to commence a wind down of its retail operations and maximise its assets for the benefit of shareholders.

The company has 13 stores across New York, New Jersey, Pennsylvania and Florida, having served its customers for nearly 60 years.

Reportedly, the decision to file for bankruptcy follows nonpayment by the company's insurance providers of approximately $175m due under policies put in place to protect against losses stemming from business interruption, such as that experienced as a direct result of the coronavirus (COVID-19) pandemic.

Concurrently, Century 21 has filed a lawsuit against several of its insurance providers based on their decision not to compensate the company for losses under the policies.

"We have no viable alternative but to begin the closure of our beloved family business because our insurers, to whom we have paid significant premiums every year for protection against unforeseen circumstances, have turned their backs on us at this most critical time," said Raymond Gindi, co-chief executive of Century 21. "We are confident that had we received any meaningful portion of the insurance proceeds, we would have been able to save thousands of jobs and weather the storm, in hopes of another incredible recovery."

A pioneer and leader in high-end, off-price fashion retail since 1961, Century 21 offers men's, women's, and children's apparel, footwear, outerwear, lingerie and accessories, along with beauty and home goods,

"While we wish that Century 21 could continue to be a must-see shopping destination for so many, we are proud of the pioneering role it has played in off-price retail and the iconic brand it has become,” said IG Gindi, co-chief executive of Century 21. “It has been a true honour for us to be part of the vibrant New York City fashion scene and to serve millions of locals, tourists and celebrities, side by side."

Century 21 stores are currently open to serve customers, with going out of business sales commencing at all of its locations and at c21stores.com.

Mr Raymond Gindi concluded, "We will be forever grateful for the vital role our customers played in building the Century 21 legacy hand in hand with our family. Together, we hope we can help our loyal customers create some final memorable Century 21 stories."

News: Century 21 to close up shop, says insurers won't cover COVID losses

NVIDIA agrees Arm acquisition

BY Richard Summerfield

UK-based computer chip designer Arm Ltd. is to be sold to American graphics chip specialist NVIDIA in a deal worth $40bn.

Arm is one of Britain’s most successful tech companies, and the decision by its Japanese owner SoftBank to sell the company could reshape the semiconductor landscape.

Under the terms of the deal, NVIDIA will pay SoftBank $21.5bn in shares and $12bn in cash for company, although the deal is still subject to regulatory approval in the UK, China, the European Union and the US. Completion of the deal is expected to take place in approximately 18 months. The deal is expected to attract opposition from its new owners’ rivals and British politicians concerned about foreign takeovers.

SoftBank acquired Arm in 2016 for $32bn and pledged to keep the company headquartered in Cambridge. NVIDIA has made a similar pledge, stating it would build additional research and support facilities at Arm’s campus in the city.

“AI is the most powerful technology force of our time and has launched a new wave of computing,” said Jensen Huang, founder and chief executive of NVIDIA. “In the years ahead, trillions of computers running AI will create a new internet-of-things that is thousands of times larger than today’s internet-of-people. Our combination will create a company fabulously positioned for the age of AI.”

“NVIDIA is the perfect partner for Arm,” said Masayoshi Son, chairman and chief executive of SoftBank Group. “Since acquiring Arm, we have honored our commitments and invested heavily in people, technology and R&D, thereby expanding the business into new areas with high growth potential. Joining forces with a world leader in technology innovation creates new and exciting opportunities for Arm.”

He added: “This is a compelling combination that projects Arm, Cambridge and the U.K. to the forefront of some of the most exciting technological innovations of our time and is why SoftBank is excited to invest in Arm’s long-term success as a major shareholder in NVIDIA. We look forward to supporting the continued success of the combined business.”

“Arm and NVIDIA share a vision and passion that ubiquitous, energy-efficient computing will help address the world’s most pressing issues from climate change to healthcare, from agriculture to education,” said Simon Segars, chief executive of Arm. “Delivering on this vision requires new approaches to hardware and software and a long-term commitment to research and development. By bringing together the technical strengths of our two companies we can accelerate our progress and create new solutions that will enable a global ecosystem of innovators. My management team and I are excited to be joining NVIDIA so we can write this next chapter together.”

News: Nvidia acquisition of Arm throws company into tech spat between U.S. and China

Continuity and COVID-19

BY Richard Summerfield

The BCI, in association with FortressAS, has published a new report looking at how business continuity and resilience may develop following the disruption caused by the COVID-19 pandemic. ‘The Future of Business Continuity’ report outlines some of the most important lessons learned in the first half of 2020 and re-emphasises the importance of well-resourced business continuity professionals.

One of the report’s major themes is that many business continuity practitioners felt they were marginalised when key strategic decisions were being made in the early stages of the pandemic. Thirty-three percent of those surveyed for the report believe it is imperative that companies have a dedicated board member responsible for promoting resilience at all levels in the organisation. Respondents also believe that business continuity should not be subordinate to other departments, such as risk, for example.

As companies react to the developing COVID-19 crisis, business continuity has become central to the operations of many businesses. Many professionals expect this rising awareness to result in extra departmental resources going forward. Around 95 percent of those interviewed are confident of securing extra support for business continuity from a financial or resource perspective post-COVID, due to management’s increased awareness of the department during the crisis.

“COVID-19 may have shaken many organizations to their foundations, but it has highlighted the importance of business continuity as being at the core of an organisation’s resilience strategy,” said Rachael Elliott, head of thought leadership, at The BCI. “Professionals are hopeful of greater attention at Board level going forward, and the pandemic has helped to act as a silo-breaker between different departments’ resilience strategies. We don’t have long to act though – respondents believe we have just six months to make these theoretical concepts into actionable processes within organizations before they are forgotten.”

Report: The Future of Business Continuity

Kimberly-Clark to acquire Softex Indonesia in $1.2bn deal

BY Fraser Tennant

In a $1.2bn deal which highlights its commitment to emerging markets, US multinational personal care  company Kimberly-Clark Corporation is to acquire diaper maker Softex Indonesia, a leader in the fast-growing Indonesian personal care market.

A large, growing market with attractive future prospects, approximately 80 percent of Softex Indonesia’s sales come from diapers – an estimated at $1.6bn market and the sixth largest in the world. The remaining sales are mostly in the feminine care and adult care categories.

Kimberly-Clark’s all-cash acquisition of Softex immediately improves its currently limited position in the country to one with strong market share in key personal care categories across Southeast Asia's largest economy.

"This acquisition represents a compelling strategic fit and demonstrates our commitment to accelerate growth in developing and emerging markets," said Mike Hsu, chairman and chief executive of Kimberly-Clark. "Moreover, adding Softex Indonesia and its brands to Kimberly-Clark will enhance our company's underlying growth prospects and help us create even more long-term shareholder value."

The acquisition is another demonstration of Kimberly-Clark's commitment to generate improved, sustainable top-line growth and create long-term shareholder value. Moreover, the transaction will be financed primarily through incremental debt and secondarily, cash on hand.

"Softex Indonesia has a strong, growing and profitable business with a portfolio of brands loved by Indonesian consumers," said Aaron Powell, president of Kimberly-Clark's Asia-Pacific consumer business. "This acquisition provides an opportunity for Kimberly-Clark to accelerate our growth in Southeast Asia, and we look forward to combining our strengths in innovation and brand building to expand on Softex Indonesia's continued success."

Since 1976, Softex Indonesia has built a successful personal care business with strong market positions and has consistently delivered double-digit growth. The company has excellent manufacturing capabilities and a strong go-to-market distribution network. Softex Indonesia generated net sales of approximately $420m in 2019.

The transaction is subject to customary closing conditions and expected to close in the fourth quarter of 2020.

News: Kimberly-Clark to buy Indonesian diaper maker Softex for $1.2 billion

Whiting Petroleum emerges from Chapter 11

BY Fraser Tennant

Although owing billions and having filed for Chapter 11, US oil & gas company Whiting Petroleum Corporation has completed a financial restructuring and emerged from bankruptcy protection.

The company concluded its reorganisation after completing all required actions and satisfying the remaining conditions to its plan of reorganisation. Furthermore, Whiting says its new capital structure will reduce debt by $3bn and includes a new $750m reserve-based revolving credit facility, set to mature in April 2024.

In connection with emergence from Chapter 11, all of Whiting’s existing equity interests will be cancelled and cease to exist. Shares of the company’s new common stock commenced trading on the New York Stock Exchange from 2 September.

Whiting was one of the first large oil companies to fall victim to the onset of the coronavirus (COVID-19) pandemic, filing for Chapter 11 bankruptcy protection in April.

The restructuring will also see a new board of directors take the helm. The new board includes chairman Kevin McCarthy and chief executive Lynn Peterson. In addition, James Henderson has been appointed as chief financial officer.

“We are excited to begin our new chapter at Whiting, with a focus on capital discipline and free cash flow generation to create long-term value for our shareholders,” said Ms Peterson. “On behalf of the Company and newly appointed board of directors, I would like to thank our employees for their patience and dedication during this process.”

Founded in 1980, Whiting Petroleum is an independent oil and gas company that develops, produces, acquires and explores for crude oil, natural gas and natural gas liquids primarily in the Rocky Mountain region of the US. The company’s largest projects are in the Bakken and Three Forks plays in North Dakota and Niobrara play in northeast Colorado.

News: Whiting Petroleum Emerges From Chapter 11 Protection