Legislative, Regulatory & Legal

New York -- Saddled with high levels of debt and sluggish sales, Brookstone Inc. is preparing to file for bankruptcy protection, with a plan already in place to be bought by another specialty retailer, the Wall Street Journal reported.

Minneapolis – Senators John D. Rockefeller (D. - W.V.) and Richard Blumenthal (D. – Conn.) publicly criticized Target’s handling of its 2013 data breach during testimony by Target CFO John J. Mulligan in front of the Senate Commerce Committee, which Rockefeller chairs. The senators said that Target’s management did not pay attention to signals from its security software and that it is time for the retail industry to make changes.

Washington, D.C. -- The National Retail Federation (NRF) told the Senate on March 26 that it’s time for an overhaul of the nation’s credit- and debit-card system, saying banks’ insistence on cards that use a signature instead of a Personal Identification Number (PIN) puts merchants and their customers at risk.

New York -- Wal-Mart Stores spent $439 million during the past two years to investigate the possible payment of foreign bribes, Bloomberg reported, making it ranks as one of the most expensive probes in U.S. history.

Wal-Mart spent $282 million in the fiscal year ended Jan. 31 and $157 million the previous year, and expenses will continue to rise, according to an annual report filed March 21. On Feb. 20, Wal-Mart projected FCPA probe and compliance costs would be $200 million to $240 million for fiscal 2015.

New York -- A pair of banks has filed suit against Target Corp. and security firm Trustwave, alleging damages suffered after the retailer’s holiday season data breach and accusing Trustwave of failing to identify security gaps.

According to a report by Reuters, which cited the American Banker, Trustmark National Bank and Green Bank N.A. are seeking damages of more than $5 million and named Trustwave Holdings and Target as defendants.

New York -- Kohl’s Corp.’s chief merchandising officer, Donald A. Brennan, resigned his position, effective as of April 1, 2014. Kohl's disclosed Brennan's departure in a filing this week with securities regulators.

Under a separation agreement with the department-store operator, Brennan will receive a one-time severance payment equal to 2.9 times his annual salary plus the average of the three most-recent annual incentive compensation plan payments paid to him, according to a regulatory filing.

New York -- Loblaw Cos. Ltd.’s acquisition of Shoppers Drug Mart Corp. has been approved by Canada’s Competition Bureau. The $12.4 billion (US$11 billion) deal is expected to close on March 28.

To win approval from the Competition Bureau, Loblaw agreed to sell 18 stores and nine in-store pharmacies.

Plano, Texas – In a March 21 regulatory filing, J.C. Penney Co. Inc. said it does not expect the result of a lawsuit filed by Macy’s Inc. alleging that Penney was selling Martha Stewart Living products in violation of an exclusivity agreement to have a significant negative impact on its results.