Fastener Week II: Phillips Screw Co.
The Lightning fastener system is the latest innovation from a venerable company.
The Lightning fastener system from the Phillips Screw Co. brings speed and efficiency to the job site (or any site) in the form of efficient, one-handed installation. The driver bit and screw work together to form a “Stick-Tight” wobble-free connection. The product’s slogan proclaims: “Never A Dropped Screw!”
It’s not the first innovation for the company. The Phillips Screw Company invented the Phillips-head drive system and received a patent for it in 1935.
The Phillips Screw Co. is one of several participants in HBSDealer’s Fastener Week II, running through Oct. 12. The HBSDealer Daily Newsletter will feature a new concept, theme or trend from the fastener industry each day this week.
Sears brings restructuring expert on board
Alan Carr is the CEO of Drivetrain, specializing in financial restructuring.
Sears Holdings Corporation has appointed Alan Carr, managing member and CEO of Drivetrain, LLC, to its board of directors.
According to Sears Holdings – the owner of Sears and Kmart stores – Carr has significant experience as a principal, investor and advisor leading complex financial restructurings, as well as serving as a director of reorganized businesses in the U.S. and Europe. Drivetrain specializes in financial restructuring.
Carr was previously an attorney at Skadden, Arps, Slate, Meagher & Flom LLP and Ravin, Sarasohn, Baumgarten, Fisch & Rosen.
“Alan brings deep experience as a director for companies that went through complex organizational change,” said Edward Lampert, chairman and CEO of Sears Holdings. “We are pleased to welcome him to the board and look forward to the benefit of his expertise as we work to maximize value for the company and its stakeholders.”
With a big debt payment coming due, Lampert – also the chairman, CEO and biggest shareholder and creditor of Sears Holdings Corp – has made a big push to save the beleaguered company from filing for Chapter 11 bankruptcy protection.
ESL Investments, the hedge fund run by Lampert, has come up with a plan that would essentially translate into a wholesale financial restructuring of the company but without a Chapter 11 filing. It would significantly reduce the struggling retailer’s $5.6 billion debt load, cutting it by nearly 80%. The plan, outlined in a securities filing made by ESL on September 24, include selling off many of Sears’ remaining stores and asking lenders to exchange their loans for equity stakes in the retailer.
Mattress Firm files for Chapter 11, closing up to 700 stores
Declining sales, over-expansion and competition from online disruptors have finally caught up with Mattress Firm.
The nation’s largest mattress retailer has filed for Chapter 11 bankruptcy protection as it looks to “strengthen its balance sheet and optimize its store footprint.” Mattress Firm, which operates some 3,500 U.S. locations, plans to close up to 700 stores. An initial group of some 200 locations will close in the next few days, with decisions about additional closings to be made in the next few weeks. (A&G Realty Partners is assisting the retailer with its store closing and lease restructuring program.) Mattress Firm listed Simmons Manufacturing Co. and Serta Mattress Co., as its biggest creditors, with claims of $64.7 million and $25.5 million, respectively.
“Leading up to the holiday shopping season, we will exit up to 700 stores in certain markets where we have too many locations in close proximity to each other,” said Steve Stagner, executive chairman, president and CEO. “We intend to use the additional liquidity from these actions to improve our product offering, provide greater value to our customers, open new stores in new markets, and strategically expand in existing markets where we see the greatest opportunities to serve our customers.”
Houston-based Mattress Firm has been under increased pressure from ongoing disruption in the once-staid mattress category. Online “start-ups such as Casper, which is now expanding in brick and mortar, have been expanding their market share by offering generous return policies and free, bed-in-a-box deliveries. Amazon recently announced it would offer a bed-in-the-box mattress, and Walmart launched its own online premium mattress brand, Allswell, earlier this year. Most recently, Serta Simmons Bedding — whose brands include Serta, Beautyrest, Simmons, and Tomorrow — merged with direct-to-consumer brand, Tuft & Needle.
“The past few years have been tough for Mattress Firm,” said Daniel Lowenthal, partner at Patterson Belknap Webb & Tyler LLP and chair of the firm’s Business Reorganization and Creditors’ Rights Practice. “It had too many stores, faced competitive industry pressures, and also had a corporate parent that was rocked by an accounting scandal. But now its goal is to get in and out of bankruptcy fast and regroup with new financing.”
The retailer expects to complete a prepackaged restructuring within 45 to 60 days. It has secured commitments for about $250 million in debtor-in-possession financing to support its operations under bankruptcy and $525 million in financing to help its emergence from bankruptcy and to continue operations. The company said it has filed motions to support the continued payment of employee wages and health and welfare benefits, and to honor its customer policies and programs. It also has filed a motion for court authorization to pay suppliers and contractors for all goods and services provided prior to and after its Chapter 11 filing.
“We thank our suppliers and partners for their continued support, as well as the contractors we partner with to make deliveries across our markets, all of whom will continue to be paid in full in the normal course for products and services provided,” Stager said.
Mattress Firm was acquired by South African retail conglomerate Steinhoff International Holdings for $3.8 billion in 2016. The company, which owns more than 40 retail brands, is involved in an accounting scandal that has damaged its stock price.
Sidley Austin LLP is serving as Mattress Firm’s legal counsel, AlixPartners LLP is serving as its financial advisor, and Guggenheim Securities is serving as its restructuring advisor.