| Thursday | ||||
Gap is expediting its… Gap is expediting its rollout of warehouse robots for assembling online orders in an effort to limit human contact during the COVID-19 pandemic, Jeffrey Dastin of Reuters reported, citing Kevin Kuntz, Gap's senior VP of global logistics fulfillment. Gap struck a deal to more than triple the number of item-picking robots it uses to 106 earlier in the year. Warehouses have faced increased web orders with less fulfillment staff because of social distancing policies Gap implemented. The company intends to finish the rollout to four of Gap's five U.S. facilities by July, months ahead of schedule. Each machine handles work usually performed by four people. Reference Link | ||||
| Over a week ago | ||||
Bearish flow noted in Gap… Bearish flow noted in Gap with 9,234 puts trading, or 1.8x expected. Most active are 5/22 weekly 7 puts and Dec-20 5 puts, with total volume in those strikes near 5,200 contracts. The Put/Call Ratio is 1.81, while ATM IV is up over 69 points on the day. Earnings are expected on May 28th. | ||||
Bullish option flow… Bullish option flow detected in Gap with 9,893 calls trading, 5x expected, and implied vol increasing almost 2 points to 96.37%. 5/8 weekly 8 calls and May-20 8 calls are the most active options, with total volume in those strikes near 6,900 contracts. The Put/Call Ratio is 0.12. Earnings are expected on May 28th. | ||||
The major averages had a… | ||||
Gap (GPS) said it intends… Gap (GPS) said it intends to reopen up to 800 of its stores in North America by the end of May as retailers are agitating to return to business after temporarily closing down amid the COVID-19 outbreak, the New York Times' Sapna Maheshwari reports. "Our goal is to be responsibly aggressive," Sonia Syngal, chief executive of Gap, told the Times in an interview. "Every retailer will have its own opening strategy, but suffice it to say we are looking to open where we're legally allowed to open as soon as we can." The reopening plan follows similar strategies announced recently by companies such as Macy's (M) and Simon Property (SPG), the author says. Reference Link | ||||
J.Crew Group announced it… J.Crew Group announced it has reached an agreement with its lenders holding approximately 71% of its Term Loan and approximately 78% of its IPCo Notes, as well as with its financial sponsors, under which the Company will restructure its debt and deleverage its balance sheet, positioning J.Crew and Madewell for long-term success. Under the terms of the Transaction Support Agreement, the Company's lenders will convert approximately $1.65 billion of the Company's debt into equity. To facilitate the restructuring contemplated by the TSA, the parent company of J.Crew Group, Inc., Chinos Holdings, Inc. and certain affiliates, have filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Eastern District of Virginia. The Company has secured commitments for a debtor-in-possession financing facility of $400 million and committed exit financing provided by existing lenders Anchorage Capital Group, L.L.C., GSO Capital Partners and Davidson Kempner Capital Management LP, among others. Subject to Court approval, the DIP financing, combined with the Company's projected cash flows, is expected to support its operations during the restructuring process. As part of the TSA, Madewell will remain part of J.Crew Group, Inc. Libby Wadle will continue in her role as CEO of Madewell. "This agreement with our lenders represents a critical milestone in the ongoing process to transform our business with the goal of driving long-term, sustainable growth for J.Crew and further enhancing Madewell's growth momentum," said Jan Singer, CEO, J.Crew Group. "Throughout this process, we will continue to provide our customers with the exceptional merchandise and service they expect from us, and we will continue all day-to-day operations, albeit under these extraordinary COVID-19-related circumstances. As we look to reopen our stores as quickly and safely as possible, this comprehensive financial restructuring should enable our business and brands to thrive for years to come." The Company has filed a series of customary "first day" motions with the Bankruptcy Court seeking to maintain its operations during the restructuring process to help facilitate a smooth transition into Chapter 11. Others in the space include Nordstrom (JWN), American Eagle Outfitters (AEO), Gap (GPS) and Lands' End (LE). | |
Gap Inc. announced it has… Gap Inc. announced it has appointed IMG as its first ever multi-brand, exclusive licensing representative. Through this partnership, IMG will deliver cross-category product extensions that increase existing consumer touchpoints while engaging with and introducing new audiences around the world to Gap Inc.'s portfolio of brands. The companies are exploring categories including baby equipment and baby care, home decor and textiles, and furniture. "Gap Inc. operates a portfolio of strong, globally relevant brands that are familiar, trusted and highly marketable across multiple demographics. We are excited to explore new market segments and complementary points of product distribution for Gap, Banana Republic and Janie and Jack in an asset-light way that harnesses their individual strengths," said Roy Hunt, Head of Gap Inc. Franchise and Strategic Partnerships. "This partnership with IMG presents a unique opportunity for us to bring our fashion and lifestyle brands to life in new ways for customers around the world, while still maintaining the creative integrity that make each of our brands so distinctive and recognizable in the marketplace." | |
J. Crew Group is… J. Crew Group is preparing for a bankruptcy filing that could come as soon as this weekend, CNBC's Lauren Hirsch reports, citing people familiar with the matter. The company is working to secure $400M in financing to fund operations in bankruptcy, the report adds, cautioning that timing could still slip, and plans are not yet finalized. Others in the space include Nordstrom (JWN), American Eagle Outfitters (AEO), Gap (GPS) and Lands' End (LE). Reference Link | |
Bearish flow noted in Gap… Bearish flow noted in Gap with 7,150 puts trading, or 1.7x expected. Most active are 5/1 weekly 9.5 puts and May-20 7 puts, with total volume in those strikes near 4,300 contracts. The Put/Call Ratio is 1.67, while ATM IV is up nearly 121 points on the day. Earnings are expected on May 28th. | |
Barclays analyst Adrienne… Barclays analyst Adrienne Yih lowered the firm's price target on Gap to $5 from $10 and keeps an Underweight rating on the shares. The analyst cut estimates for Gap to reflect the impact of COVID-19, the recent $2.25B debt raise, and dividend suspension. Yih assumes that store closures remain through May 31. |