Watch Retailer Invicta Stores Declares Bankruptcy, Blames Landlords

Invicta Stores, a watch retailer with locations in Times Square and malls across the country, filed for bankruptcy this week, the latest retailer to seek Chapter 11 protection and look to close stores amid choppy economic waters.

The Davie, Florida-based retailer — which operates 24 brick-and-mortar locations selling watches manufactured by Invicta Watch Company of America — said in its filing that its bankruptcy was caused by disputes with its landlords, including the nation’s largest mall operator. It listed between $10M and $50M in assets and $50M to $100M in liabilities in the filing in the Southern District of Florida.

“The company has strong and consistent cash flow but is benefitting from temporary chapter 11 protection while it restructures some of its debts, particularly as to its shopping mall leases,” Aaron Wernick, the bankruptcy attorney representing Invicta Stores, told Bisnow in a statement. “As part of the reorganization, the Debtor will shed any leases it deems cumbersome and which are a drag on its profits.” 

Invicta Stores, which is registered as Retailing Enterprises LLC, is an official reseller of Invicta Watches but is not affiliated with the watchmaker. The company is most prominent in Florida and has locations in nine states and Puerto Rico, in popular retail hubs like Downtown Las Vegas, the Aventura Mall in South Florida and Lenox Square Mall in Atlanta.

The Chapter 11 declaration, written by Invicta Stores owner Mauricio Krantzberg, states that “disputes with various landlords, including but not limited to Vornado Realty Trust and Simon Property Group” were the main cause of the company’s need to restructure. 

The bankruptcy petition shows that Invicta Stores owes Simon $3.8M, although Wernick said in an email that amount is under dispute. Nine of Invicta Stores’ 24 locations are in malls owned by Simon, and the claim against the store operator is related to lease agreements, according to the filing. The Simon claim is the only one disputed in the filing.

The petition also lists a $1.6M liability to Vornado Realty Trust. Seven of the 20 largest creditors to Invicta Stores are landlords, according to the bankruptcy filing. The debts owed to Vornado and Simon are surpassed only by a $29.5M debt for inventory it purchased from the watchmaker and a $9.8M debt to City National Bank of Florida.

Invicta Stores was founded in 2011 and is a nonexclusive dealer of Invicta Watch Company of America products, but only sells Invicta watches, employing 175 people at its stores, Krantzberg wrote in the declaration. The company has historically been profitable and brought in $80M of revenue in 2021 and $115M in 2022, he wrote. 

The company has licensing deals with the National Football League and Disney to carry branded watches and touts "exotic materials" it uses in its products, such as meteorite, abalone, titanium and carbon fiber.

Invicta Stores buys between $500K and $1.2M of watches a week from the watchmaker and makes regular back payments; the company asked the bankruptcy court to allow it to continue to make those payments as it goes through restructuring.

“Without an uninterrupted supply of goods from Invicta, the Debtor would not be able to operate,” Wernick wrote in the emergency motion. “The Debtor believes that without approval to continue this long-standing business arrangement, Invicta will no longer supply inventory to the Debtor, which will put the Debtor out of business and into a forced liquidation.”

The bankruptcy filing isn’t the first legal dispute Invicta Stores has had with a landlord. 

A Vornado affiliate sued Invicta Stores on Nov. 19, 2020, for nonpayment of rent at its Times Square location, according to court filings. The company alleged that Invicta Stores vacated its 1535 Broadway location on Nov. 6 and failed to make a $513K rent payment. 

The landlord said in its suit that it anticipated Invicta Stores would not reopen the location and asked the court for a $15.6M judgment that represented the value of the remaining rent payments for the lease, which ran through June 2028.

In a settlement dated Dec. 31, 2020, Invicta Stores and Vornado agreed to reinstate the lease with additional stipulations and the location remains open today. 

Spokespeople for Vornado and Simon didn’t respond to Bisnow’s requests for comment. 

“The Debtor plans to emerge from the case with leaner and more efficient operations, and with a reorganization plan which will benefit its creditors while ensuring a successful future," Wernick said. 

Invicta Stores is the latest retailer to have entered Chapter 11 bankruptcy in recent months as shifting consumer demands and rising interest rates have pushed companies to attempt to restructure their debts in court. 

Christmas Tree Shops declared bankruptcy on May 5, just two weeks after Bed Bath & Beyond entered Chapter 11 restructuring on April 23 and announced that it would shutter all 360 of its locations. Those came on the heels of David’s Bridal declaring bankruptcy after announcing plans to lay off 9,000 U.S. workers. 

At least 10 major retailers have filed for bankruptcy protection so far this year — more than 2022’s total, according to Forbes — and experts expect the pace to accelerate as store operators are weighed down by the rising cost of capital, persistent inflation, record levels of household debt and other factors.