AMTRAK PLEADS FOR $5.9 BILLION. The nation’s premiere rail carrier needs the funds now to prevent service cuts, layoffs, and to “stave off bankruptcy,” CEO William Flynn told Congress on 9 September.
Amtrak has announced it will lay off 10 percent of its 20,000 workers by the end of this month and is cutting its daily cross-country service to three times weekly.
Ridership fell 95 percent during the worst of the shutdown, and Amtrak has projected a 50-percent fall in revenue next year.
Congress subsidizes Amtrak with $1.9 billion annually and recently granted the carrier $1 billion in emergency funding.
STARWOOD LOSES SEVEN MALLS. The $60-billion Starwood Capital Group has surrendered seven malls to its lenders, which it bought seven years ago for $1.6 billion.
Last spring, the company defaulted on bonds it has issued in Israel. The default caused a ratings firm to downgrade the debt, triggering a contract clause requiring Starwood to pay off the bonds sooner. The clause also allowed the lenders to seize the bonded assets.
The company acknowledged that the retail sector faces unprecedented difficulties with “tenant performance, anchor stability, and capital markets.” Starwood said the lost malls, and retail storefronts generally, are a small portion of its portfolio.
CENTURY 21 GOES BUST. The discount retailer will close its 13 stores and liquidate its assets as part of its Chapter 11 bankruptcy.
The New York City-area chain offered discounts on name-brand fashion merchandise.
The discounter blamed its demise on its insurance company’s refusal to pay the company’s $175-million claim for reimbursement of business losses.
AMERICAN EAGLE OUTFITTERS POSTS LOSS. The clothier, with more than 1,000 stores in Canada, China, Hong Kong, Mexico, and the U.S. and licensees in 25 countries, reported losing $13.75 million in its fiscal second quarter.
The company attributed the loss to plummeting sales due to stores closed during the economic shutdown.
American Eagle brand’s online sales rose 21 percent during the period; digital sales of its Aerie brand more than doubled.
G-III APPAREL GROUP SALES FALL MORE THAN HALF. The owner of Calvin Klein, DKNY, and Donna Karan, among other fashion brands, saw sales fall 54 percent during the quarter ending 31 July.
The company reported a loss of $14.9 million.
G-III’s overall sales in the second half of its fiscal year will be 28 to 33 percent below those of the same period last year, the company said.
NAVISTAR INTERNATIONAL SALES PLUMMET. The truck maker reported $1.68 billion in sales for the third quarter of its operating year, down 44.9 percent compared to the same period the previous year.
The result: a $37-million loss, compared to a $156 million in profit and $1.56 a share a year previous.
The company said the quarter began in the midst of the economic shutdown and “our results certainly reflect this.”