PhillyDeals: Record-low bond yields helping store chains raise money cheaply

Big store chains, like much of corporate America, have stabilized, with help from record-low bond yields that help surviving chains raise money cheaply.

But locally owned stores that depend on bank loans are having a tough time raising funds, forcing them to cancel expansion plans and close marginal stores, Andrew DiZio, analyst at Janney Capital Markets, wrote in a report to clients.

"Many local businesses, or 'mom and pops,' are still struggling, and those who are having success cannot secure financing to expand," according to DiZio. Low-end franchise chains like Subway and Payless are opening new stores, but major shopping-center landlords show that small-shop occupancy in general has fallen up to 10 percent in the last two years.

Tapping the markets

Christopher Stanchak's upstart online events ticketing agency, TicketLeap Inc., of Center City, borrowed $339,000 in a private debt sale.

Wish Upon a Hero L.L.C., the for-profit affiliate of the Moorestown charity Wish Upon A Hero Foundation, which has won flattering stories from the national media for its website linking good causes to donors, raised $950,000 from equity investors. (I asked David Girgenti, founder of both the charity and for-profit company, how he plans to make money for his new investors. He said he'd tell all, for a future column.)

Skinny Nutritional Corp., which sells flavored, no-calorie Skinny Water from its Bala Cynwyd headquarters, says it raised $280,000 in its latest private-equity offering, bringing its total for the last five years to $12 million.

How does money-losing Skinny find investors? The company is paying 10 percent of what it raises to brokers like Hudson Valley Capital Management in suburban New York.

Mark Gillis, chief executive at the three-man brokerage, told me he has been selling Skinny equity offerings all through the business slump.

"We gave them their first seed money at a few cents a share," he said, which investors were able to cash out after the penny-stock's value bumped up on positive product announcements.