FINANCE

J. Crew is entering into a deal that it expects will put it one step closer to improving its business.   The fashion retailer has won the support of more than 50% of its term loan holders to trim its $2 billion debt load and end intellectual property litigation. This was according to sources familiar with the situation, according to Reuters.  

The Kroger Co. lowered its earnings guidance amid a decline in Q1 same-store sales as price competition in the supermarket industry intensifies.    Sales rose 4.9% to a better-than-expected $36.3 billion for the quarter ended May 20, up from $34.6 billion last year. Same-store sales excluding fuel declined 0.2%, the second consecutive quarter of decline.  

Sports Direct, the largest sporting goods retailer in the United Kingdom, has expanded its presence in the United States.   The company announced that it has completed its acquisition of Bob's Stores and Eastern Mountain Sports. It will initially operate a total of some 50 stores in the Northeast and five EMS outdoor adventure schools, along with e-commerce sites for both brands.   

Cautious consumers kept spending in check in May.     Retail sales in May were essentially unchanged on a seasonally adjusted basis after an upwardly revised gain of 0.6% in April, according to the National Retail Federation. The NRF numbers exclude automobiles, gasoline stations and restaurants.   In May, sales were 5.3% above the year-ago level on an unadjusted basis and increased four percent on a 3-month moving average year-over-year.   

Already under the gun to improve business operations, Whole Foods Markets’ founder and CEO finds himself in a new struggle.  

The chain, which is known for its signature soups, sandwiches and salads, is slated to report digital sales well above $1 billion on an annualized basis. The chain is on track to be twice as high in two years, according to CNBC.  

Sears Canada isn't sure about its ability to remain a going concern.   The struggling retailer on Tuesday said it doesn't have enough cash flow over the next 12 months to meet its its obligations, and warned that it may have to restructure or be sold.  The company cited a "very challenging environment," and noted it has had recurring operating losses and negative cash flows from operating activities in the last five fiscal years, with net losses beginning in 2014.    

The clear signal sent by these first quarter numbers is that J. Crew is a company in trouble. As much as the business is used to decline, the accelerated pace of deterioration, as evidenced by the 6.3% drop in overall sales and the 12% fall in J. Crew comparables, is worrying. That this weakness comes off the back of negative prior year numbers suggests that the company has not yet reached rock bottom.