Distressed retail paper higher after Joann bankruptcy; Michaels, Staples notes improve

By Cristal Cody

Tupelo, Miss., March 18 – Distress in the retail space expanded on Monday on the Chapter 11 bankruptcy filing of fabric and craft retailer Joann Inc.

The company sounded bullish on plans to reorganize.

Product prices, blamed for some sluggish sales issues with high dollar merchandise, are expected to come down to more friendlier prices, a source said.

“I think they’ve closed the stores not operating the strongest,” the source said.

Paper in other troubled retailers has been on the mend in late February and so far in March.

Michaels Cos, Inc.’s 7 7/8% senior notes due 2029 (Caa2/CCC-) edged up 1/8 point on Monday to 69 1/8 bid, a source said.

The notes have added nearly 10 points over the past month.

Staples Inc.’s 10¾% senior notes due 2028 (Caa2/CCC) “are up,” a source said Monday.

The notes were quoted up less than 1/8 point with a 93 bid handle on about $4 million of volume.

The issue has climbed around 15 points in the past month.

Distressed secondary trading overall was lighter as the week kicked off, sources reported.

“The market was up,” a source said. “It was very quiet.”

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