Business briefs
S&P downgrades rue21, expects general default
S&P Global Ratings lowered its corporate credit rating on Cranberry-based teen retailer rue21 to “D” from “CC.” The ratings agency also lowered the issue-level rating on the first-lien term loan facility, as well as on unsecured notes. “The downgrade reflects our belief that rue21 will not meet its financial obligations following the conclusion of the forbearance agreement with its lenders,” said credit analyst Mathew Christy. “We anticipate a default by the company will be a general default. Rue21 has a $538.5 million first-lien term loan ($520 million outstanding) and a $250 million unsecured notes ($145 million outstanding), as well as significant outstanding debt under its asset-backed revolving credit facility.” The privately held company last month moved to close almost 400 stores throughout the country.
EDMC issues layoff notice to corporate employees
Education Management Corp. plans to lay off 40 to 75 employees this summer at its corporate headquarters in Downtown if its proposed sale of schools is approved by regulators. According to a notice filed with the state, the for-profit education company anticipates closing its offices on Sixth Avenue with the sale of its Art Institute schools, as well as the South University and Argosy University educational systems to the Dream Center Foundation. In March, EDMC announced its intent to sell the schools — all of its schools currently accepting new students — to the Dream Center, a Los Angeles-based philanthropic
organization affiliated with a Pentecostal church that funds programs across the country for underprivileged people.
Goodwill to open welcome center
Goodwill Industries will launch a welcome center next week to help consumers better access the agency’s services. The center will be located at Goodwill’s Workforce Development Center, 118 52nd St., Lawrenceville. Specialized staff members will conduct an assessment with individuals to determine if they have barriers to employment and their income status. Then individuals will be connected with appropriate support services. The launch day events also will feature a resource fair that is free to the public.
U.S. productivity posts sharpest fall in a year
The productivity of American workers fell in the first quarter by the sharpest amount in a year, while labor costs increased. The Labor Department says productivity declined at an annual rate of 0.6 percent in the January-March quarter after rising at a 1.8 percent rate in the fourth quarter. It was the biggest decline since a 0.7 percent rate of decline in the first quarter of last year. Labor costs rose at a 3 percent rate, up from a 1.3 percent rate of increase in the fourth quarter.
Judge allows St. Louis minimum-wage hike, will start Friday
St. Louis’ embattled minimum-wage hike will take effect Friday following a twoyear legal fight over the city’s effort to require employers to pay workers at least $10 an hour. A circuit court judge lifted an injunction on Thursday that had blocked a 2015 ordinance from becoming law. The city’s minimum wage will rise again in January, to $11 per hour, significantly higher than Missouri’s $7.70 minimum. The increase is expected to give an immediate raise to roughly 35,000 workers.
Joe’s Crab Shack owner said to prepare bankruptcy filing
The operator of the Joe’s Crab Shack and Brick House Tavern restaurant chains is preparing to file for bankruptcy, according to people familiar with the matter. Ignite Restaurant Group Inc. could file as soon as next week. In April, the company said it was pursuing options including a possible sale. A spokesman for Ignite at ICR didn’t immediately return calls and emails seeking comment on a potential filing. The dining sector has been facing drops in customer traffic. Joe’s Crab Shack was founded in 1991 as a national chain of seafood restaurants. As of January, Houstonbased Ignite operated 112 Crab Shacks and 25 Brick House Taverns.