It isn’t rare for companies to go out of business, even the biggest names in the game. Whether their products are no longer desired by consumers or people are now buying on the Internet instead, these businesses are feeling the effects.
These beloved stores have no choice but to close their doors and file for bankruptcy. Think you can guess a few on the list? Read on to see which stores are at risk of going out of business in 2019.
The clothing company that Michelle Obama, the former first lady, favors has been shutting down some of its stores because its sales have been plummeting in the past few years.
In addition, the company has even closed its bridal store and said goodbye to Jenna Lyons, its creative director, and Millard “Mickey” Drexler, its CEO. Drexler said that he thought the company’s problems came from raising prices.
Sears Holdings has been experiencing some problems for around 10 years now, with the continuing decline of their sales. It appears that this company has tried everything to stay afloat – cut costs, sell assets, close stores, and even lay off employees – but according to RetailDive, all of those steps did not help the huge department store much. As a result, in October 2018, it had to file for Chapter 11 bankruptcy, stopping the operation of 142 stores in the process.
The CEO, Eddie Lampert, attempted to avoid bankruptcy by getting hundreds of millions of loans from his hedge fund (of course, with corresponding interest). However, things didn’t look so good for the retailer, and even a hedge fund couldn’t help it stay afloat.
99 Cents Only
This retail company, which offers discount products, has found itself in a very difficult situation because of the competition from other companies such as Dollar Tree, Walmart, and Dollar General. It even reported a net loss of $27.1 million in December 2017. That is in addition to the $33.6 million in losses it has incurred in the second quarter and another $8.8 million in the first quarter. This 35-year-old company has tried to turn the tide.
It was sold to Ares Management, then to Canada Pension Plan, and eventually to a private family. It even got itself a new CEO, Jack Sinclair, replacing its former CEO, Geoffrey Covert. Despite the reports of it having positive same-store sales, the fact remains that 99 Cents Only is still in a losing game, just like GNC, the vitamin retailer.
According to RetailDrive in 2017, GNC’s gross revenue fell 3.4 percent year after year to approximately $2.5 billion, while it had debt worth $1.3 billion. The chief executive of GNC said that the company was doing well in China and on e-commerce in the second quarter of 2018. However, GNC also reported that in the second quarter of 2018, its top-line had experienced a drop in its sales and profits.
The company also reported that it would sell 40 percent of its shares to a Chinese pharma company. The said Chinese company will then produce, promote, sell, and distribute GNC products in China. Fred’s top-line sales have also experienced a nosedive.
In May 2018, Fred’s Pharmacy reported that its gross sales for the previous fiscal year dropped 4.3 percent and its bottom-line loss reached $139.3 million. Fred’s tried to establish 1,000 stores around the U.S., increasing its number from 600 stores, but the plans fell through. RetailDive reported that extra spaces for stores were available for the taking. The said spaces were available and Walgreens tried to negotiate a deal with Rite Aid but it didn’t work out.
In February 2018, Fred’s CFO left the company, placing a former media executive as the replacement. Fred’s put “Plan B” into place, going up for sale. It sold CVS, its specialty pharmacy, for $40 million. A big maternity company also experienced some executive shakeups when things didn’t go well for them.
RetailDrive said Destination Maternity has a big presence in the maternity apparel industry, having over 1,000 stores. The CEO of Destination Maternity left the company one quarter last year when the gross sales dropped more than 7 percent. Having been on its second interim CEO, the company got Berkeley Research Group to help it recover.
The company guessed that their broken relationship with Kohl’s was the cause of its problems. In the fiscal year in 2017, its total year over year sales fell 6.4 percent which sums up to $406.2 million. However, there is hope for this company yet – it had a 40 percent rise in its e-commerce comps. Ascena, another company on this list, may have better chances.
This company is responsible for retailers like Dress Barn, Ann Taylor, Lou & Grey, and LOFT. According to RetailDive, things have not improved even when they hired a new chief for Dress Barn. To save the brand, it’ll close 25 percent of its stores by 2019. RetailDive also reported that Ascena was expecting a $1.7 billion sales in the 2017 fiscal year.
The retailer reported in March that its top-line sales dropped year over year. However, in May things seem to be looking up as Moody’s, a financial services company, said that Ascena “is on a path to developing a strong ‘backbone’ of retail capabilities.” Stein Mart has similar struggles but is also on the mend.
This discount department store based in Jacksonville has been struggling with its sales but is seeing some light in the proverbial tunnel! Stein Mart has managed to put some balance in their sales and their digital revenue has increased by 47 percent in the latter half of 2017. The company did report a $23.4 million bottom-line loss for the year but has further added that the loss was decreased by 10 percent.
It looks like there is no need to worry about our favorite discount store! The store did announce earlier this year that they have sought the help of some advisors to find viable solutions to their problems. According to RetailDive, in March, Stein Mart even closed on a $50 million term loan which they could increase. However, another company, JC Penney, doesn’t seem to have the same promising future as Stein Mart.
This department store isn’t doing very well although it has better performance than Sears. The store has laid off 1,000 employees as well as closed a distribution center in 2018. Its top-line sales fell 0.3 percent with a $116 million net income in 2017. RetailDive reported that the company is having difficulty in reverting things back to better times. One big factor in their struggle is its $4.2 billion debt.
According to RetailDive, JC Penney investors are becoming more and more impatient with the slow progress. The company has also made changes to its lineup of executives including its CEO. In May 2018, Marvin Ellison left his position as the chairman of the board to lead Lowe’s. Maybe they should also consider changing what they offer like Office Depot?
This retailer of office supplies experienced some difficult times in 2017 with its sales dropping 7 percent to $10.2 billion. Gerry Smith, its CEO, announced that the company would be shifting from doing only retail sales to also providing services. RetailDive reported that the new emphasis is increasing the top-line of the company.
A business to business service that Office Depot provides is a subscription program called the “BizBox.” This sub-unit provides services more than products. The investment in its services also covers the acquisition of CompuCom, an IT firm. Another company, Vitamin Shoppe, has also tried to change its company’s focus.
Retailers of vitamins seem to share similar struggles in their sales just like GNC, and now, Vitamin Shoppe. Just like GNC, it has shifted into making their e-commerce business and has also started its own subscription service. However, the company still saw an 8.5 percent drop in its top-line sales in 2017 which is approximately $1.2 billion.
RetailDive ascribes this struggle that Vitamin Shoppe and GNC are going through to the decreasing popularity of malls as well as the increasing number of supplement store competitors. Vitamin Shoppe is hopeful that they can turn things around by expanding their categories, doing events, opening delivery services, and many more. However, Neiman Marcus isn’t making a lot of progress in turning things around.
This retailer of luxury clothes saw a 5 percent drop in its top-line sales to $4.7 billion in the 2017 fiscal year. Neiman Marcus tried several things to make some improvements and RetailDive said they seemed to be working. However, the company’s interest expenses are still a huge burden. Other suggested strategies involved cutting more than 200 jobs and making “Digital First,” a customer engagement plan. .
Hudson’s Bay, a Canadian company, considered acquiring Neiman Marcus, the luxury clothing retailer. Sources reported to the WSJ that the two companies were having talks in March. However, the plans of buying the luxury retailer did not work out because Hudson’s Bay was worried about the declining sales of Neiman Marcus. Another store that is affected by the decreasing interest in malls is Bebe
The sales of this fashion retailer started declining when Neda Mashouf, its creative director, left after she divorced her husband in 2007. Manny Mashouf started the company in 1979. According to RetailDive, the declining popularity of malls played a major role in the challenges that Bebe is now facing. It reportedly had an operating loss of $4.6 million in 2017.
The company attempted to remedy the situation by staying away from the usual retail space. It paid out $65 million to close its physical stores and focused solely on e-commerce. Forbes reported that in 2016, Bebe had a total of 180 stores. What Bebe went through might be common for retailers but Pier 1 has an unusual problem…
Pier 1 Imports
Jeffries, a research and strategy company, reported that 2018, for Pier 1, would be a “heavy investment year” as it would be handling its “sourcing, merchandising, pricing, marketing, store ops, e-com, and supply chain.” A 9.2 percent drop in the net sales was seen in the first quarter of 2018 which translates to $371.9 million year over year. Pier 1’s credit rating was also downgraded by S&P Global analysts.
Oh no! What’s more? Trumps 10 percent tariff against Chinese goods is another card against them. Pier 1 once reported that over half of the goods they sell are made in China. Pier 1 needs a new solution to its problems, but we hope it won’t be the same as Lands’ End’s methods.
This retail company specializes in clothing, luggage, and home furnishings. However, customers don’t seem to appreciate this anymore. According to CheatSheet, Lands’ End’s association with Sears is the original cause of its troubles. Sear’s went on another direction in 2013. The sales of the catalog items are strong, according to the website. However, Federica Marchionni, Lands’ End’s former CEO, made some fatal mistakes.
According to CheatSheet, one such brand was the youthful Canvas brand which aimed to attract consumers who were fashion-forward. Canvas wanted to feature clothes in “designer styles to relaxed looks.” However, the brand, despite being trendy did not get its target clientele onboard. Our favorite guitar supplier may have better chances of recovering.
In 2018, this supplier of rock n’ roll instruments was given a year to pay a $900 million debt. The company has been around for over 50 years now, but it seems like people don’t buy as many guitars as they used to. CheatSheet reported that Guitar Center’s sales for electric guitars fell 36 percent from 2005 to 2016.
This instrument retailer may be experiencing some financial problems, but it still plans to open new stores. It managed to temporarily solve the crisis by getting emergency loans. Its EVP of merchandising and e-commerce said in an interview with Forbes that the company was in transition and that it was still going strong.
The grocery chain Winn-Dixie isn’t really winning as it’s operator, Southeastern Grocers, filed for bankruptcy protection Chapter 11 in order to restructure its debt. It closed almost 100 stores and paid off $600 million of its debt. The company said that it has shifted its focus to remodeling and rebranding its stores which are still in operation. They are hoping that this will help improve things in the company.
According to CNBC, Southeastern Grocers, which also operates Bi-Lo, faces competition like big-box stores like Target and Walmart as well as the e-commerce giant Amazon.com. Southeastern is based in Florida but it also runs stores in many other southern states such as Georgia, Alabama, Mississippi, and North and South Carolina.
CheatSheet has reported that the shoe retailer has a debt worth $1.5 billion and is currently negotiating to restructure it. Bloomberg says that this includes selling parts of the company as well as filing for Chapter 11 bankruptcy. In its attempt to stay afloat, the company has sold off Easy Spirit, another brand it owns. I also ceased operation on all of its stores except for only 25 of them.
In addition, The Washington Post says that the Nine West Holdings will shift its focus from shoes to its clothing and jewelry lines which includes brands like Kasper Grouper, Anne Klein, and One Jeanswear Group. The Post reports that the decreasing demand for sandals, ballet flats, and heels has affected Nine West Holdings’ sales. The changes in consumer interest have also played a huge part in the challenges that David’s Bridal is facing.
These days, more and more brides opt to have more casual attires and cheaper events for their weddings. That’s why those in the wedding industry such as David’s Bridal are experiencing drops in their sales. According to CheatSheet, the company has a $520 million loan with is due in 2019 and a $270 million unsecured notes due in 2020. Scott Key, the company’s new CEO, might be doing some refinancing of their debts.
RetailDive says that the wedding dress superstore sees some market and operational challenges: sales, margins and earnings dropping. In addition, David’s Bridal’s credit rating was downgraded by S&P Global in June 2018. They may have to consider other ways of surviving like Bon-Ton.
This retailer has been around for 100 years! Just like how the saying goes, all good things must come to an end, but did they? Bon-Ton, a department store, and online retailer filed for bankruptcy last year. It was then sold and liquidated. However, in October 2018, it relaunched its site for e-commerce and announced its plans to reopen some of its stores.
USA Today reported: “The reinvented Bon-Ton would be sleeker, more e-commerce focused business.” Bon-Ton was first established in 1898, and its heyday was between the 1900s and 2000s. CheatSheet reports that they were very successful in the past because they were in small towns with very little competition. However, Amazon changed the market for them. Another company that could benefit from observing the customer’s preference for e-commerce is Tops Market.
The most common reason why a company files for bankruptcy is its failure to keep up with the changing interest of their consumers. According to CheatSheet, this is exactly the case with Tops Market. With more and more shoppers interested in non-traditional food sellers, competition, and falling food prices, Tops Market had no choice but to file for Chapter 11 bankruptcy.
However, shoppers can still go to Tops. For now, The East Coast grocery chain will keep most of its stores open in Pennsylvania, Vermont, and New York. The Buffalo News gives us a glimmer of hope for the company, saying that in July 2018 the company was freed from the $80 million annual interest it had to pay in 2017.
This luxury footwear brand made it on the list of USA Today – but it’s not a list that they would like to be on. USA Today included Cole Haan on their list of 26 companies which are most at risk in 2018. The company even attempted to appeal to the rising trend of athletic shoes by changing its image and focusing more on sneakers instead of dress shoes.
Cole Haan was owned by Nike, an athletic shoe brand. Then, it was bought by Apax Partners in 2013 and it abandoned Nike’s famous comfort technology. Cole Haan had included sneaker comfort into their dress shoes. Now, it’s even competing against its former mother company and USA Today reports that it is not experiencing any improvements… So does Charlotte Russe!
In March 2019, CNBC reported that the women’s apparel company Charlotte Russe is liquidating and will cease operation in all of its stores. When it filed for bankruptcy protection in February 2019, it originally planned to close only 94 of its retail stores. That number quickly went up to 500 stores all over the United States. According to CNBC, the main reason for this huge leap was that a liquidator got the winning bid in the auction for it in bankruptcy court.
Charlotte Russe stores were historically located in malls. As is commonly known, malls have experienced a huge decrease in foot traffic over the years. So, Charlotte Russe could be another victim of fewer people going to the malls, the ever-changing consumer interests, or both!
Many women have fond memories of Claire’s, especially in their formative years. It was their go-to place in any mall for girls’ jewelry and accessories. They even have their ears pierced there for the first time. However, this store which was first established in 1961, may not be part of the future young girls’ memory any longer as it had ceased its IPO.
CheatSheet reported that it might mean that a 2018 bankruptcy was imminent and it did happen. The company applied for Chapter 11 bankruptcy in March 2018 and planned to lessen its debt by $1.9 billion. By May 2018, it had shut down 130 stores. It now plans to sell itself to potential investors and buyers.
FullBeauty Brands Holdings Corp
FullBeauty is the owner of brands for plus-size men and women like Woman Within, fullbeauty.com, Jessica London, ellos, Roaman’s, Brylane Home, and KingSize. This retailer also blames the e-commerce giant Amazon for its declining sales. This reason is not surprising as many retailers have given the same reason for their financial problems. Apax Partners, owner of FullBeaty, included this reason in their message to their lenders in 2017.
The company reported to its lenders that its revenue dropped 30 percent in the first quarter of 2017’s fiscal year. FullBeauty had major changes in its executive team in July 2018, bringing on board Bob Riesbeck as its CFO, Liz White as the chief customer officer, and Robert Lepere as the chief people officer. In their press release, the new executives promised to lead the company into more progress.
This outdoor company had some problems with debt. In 2017, Golden State Capital, this Bellevue-based company’s owners, was thinking of selling the company to solve their financial problems. In the same year, their credit ranking was downgraded by S&P Global. This challenge, however, is nothing new to the company as it did come back from bankruptcy in 2009.
Golden State Capital saved it from bankruptcy when they bought it in 2009. According to Nasdaq, the brand has had difficulties in keeping up with the trends. However, according to the stock exchange, it’s not really worried about Eddie Bauer anymore as the outdoor retailer is considering a merger with the California-based Pacific Sunwear. We wonder if Bluestem Brands would consider a merger…
Bluestem Brands is a retailer of appliances, apparel, electronics, beauty, and health products. It has 13 e-commerce sites like Bedford, Appleseed’s, Fingerhut, Fair, Draper’s & Damon’s, Gettingon.com, and Blair. The company made the list of Business Insider’s at-risk companies. In June 2018, a press release on BusinessWire showed some decline in numbers…
Bluestem had shown its numbers in 2017 in the said press release. It showed that its net sales fell 10.9 percent at $381.1 million compared to its net sales in the first quarter of the fiscal year of 2017. The adjusted net sales didn’t include the exited businesses which lessened the drop in the net sales to 5.1 percent. It seems like PetSmart is doing better than Bluestem Brands.
This retailer of pet products has over 1,500 stores in Canada, Puerto Rico, and the U.S. PetSmart saw the need to restructure their advisors to better handle its debt problem worth $8 billion. According to Reuters, none of its debts will mature until 2022. The root cause of PetSmart’s problems is basically the same as the others.
More and more consumers are turning to e-commerce these days as it is more convenient and it sometimes offers cheaper prices. PetSmart is also affected by this trend and experienced some difficulties because of it. PetSmart did buy Chewy, an e-commerce site, but the $3.35 billion expense for the site added another burden to its existing debt. Reuters reported that it was the highest amount a company ever spent on an e-commerce site.
In 2017, this shoe retailer filed for Chapter 11 bankruptcy protection, let go of their employees and closed more than 600 stores. Fortunately, Payless managed to make a successful comeback after reorganizing in August 2017. However, S&P Capital Markets says that the company is still in danger of nonpayment. Even though Payless had to close down hundreds of its stores, it still has a lot of stores (3, 500 to be exact!) to run while it is trying to handle the problems it is facing.
Paul Jones, Payless’ CEO, said in an interview in 2017, “We have accomplished our goals of strengthening our balance sheet and restructuring our debt load, positioning Payless to create substantial value for our stakeholders.”
BKH Acquisition Corp.
BKH Acquisition Corp., through its subsidiary Caribbean Restaurants, runs more than 100 Burger King restaurants in Puerto Rico. However, the company made it on the list of a division of New Generation Research, Inc. called Distressed Company Alert. In their report, BKH Acquisition Corp got a “low rating.” In fact, S&P Global Ratings downgraded BKH Acquisition Corp’s credit rating to CCC+ on January 11, 2017, from B-.
S&P only gives this rating when it deems a company to be vulnerable. Olya Naumova, a credit analyst, explained that the downgrade was mostly due to the persistent economic weakness of Puerto Rico as well as the company’s ongoing credit crisis.
People do need mattresses. However, there’s a chance that you might not get to buy a new one from Mattress Firm any longer. On October 5, 2018, the company filed for Chapter 11 bankruptcy protection according to CNBC. Their difficulties in finances were partly because of an accounting scandal and what CNBC called “an onerous store footprint.”
Mattress Firm announced that it planned to put 700 of its 3,500 stores on the market and 200 planned to cease operations just days after the bankruptcy announcement. It aims to get out of unnecessary leases and successfully restructure its business. The next company on this list also filed for Chapter 11 bankruptcy protection.
This company that started in Los Angeles also owns Conway, Anna’s Linens, and Fallas. In August 2018, the company filed for Chapter 11 bankruptcy, stating that it planned to stop operations of 74 of its over 340 stores in Puerto Rico and the U.S., according to CNBC. The said publication even went on to say what may have caused the company’s problems.
The fact that National Stores has acquired many brands throughout the years may have caused it to take on a lot of debt. This possibly dragged the whole business – including all of its brands – down into bankruptcy. Today, locations are in stand-alone shopping centers or in open-air. Up next is a company from California that filed for Chapter 11.
This San Francisco-based department store operator also sells Gump’s By Mail and Gump’s Corp. CNBC said that when it couldn’t find a buyer, in August 2018, it filed for Chapter 11 bankruptcy. In the company’s press release, it said that an “overwhelmingly difficult retail environment” has made business function very challenging. The company’s Gump’s By Mail was its attempt to sell their products online but competing against the e-commerce giant Amazon seem to be difficult.
It is still looking for a buyer. Until it does, Gump’s Holdings will continue to operate despite the challenging circumstances. It will also work on getting rid of a lot of its goods. It has already sought the help of liquidators to take care of its merchandise and begin repaying its creditors.
It appears that August 2018 is a good time to file for Chapter 11 bankruptcy. Brookstone was another company that filed for Chapter 11 on the said month and planned to close 101 stores in the U.S., according to CNBC. Brookstone is famous for its tech products and home items like gadgets, fancy pillows, and massage chairs.
Just like Gump’s, Brookstone is also searching for a buyer but only for its e-commerce businesses, airport stores, and wholesale operations. CNBC reports that it’s closing all 101 stores in other locations. The report continues to say that landlords haven’t had so many vacant spaces in malls since 2012. Up next is another shoe company at risk for bankruptcy.
Rockport Group specializes in shoes with retailers selling their products in over 60 countries. In May 2018, it filed for bankruptcy, joining the ranks of fellow shoemakers Nine West and Payless. After it filed for bankruptcy, it was bought by Charlesbank Capital Partners, a private-equity group, completing the acquisition in July 2018. Hopefully, it makes a successful comeback.
Chalesbank Capital, the private-equity group that bought Rockport, also ventured in other businesses like Shoppers Drug Mart, Princeton Review, and Papa Murphy’s Take ‘N’ Bake Pizza stores. Those companies are quite different from each other. Now, adding Rockport, this private-equity company has a very diverse portfolio! We will cover another show company that filed for Chapter 11.
The Walking Company
There seems to be a connection between shoes and bankruptcy. We have so far named a few shoe companies that filed for Chapter 11 bankruptcy. We mentioned Nine West, Payless, Rockport, and now, The Walking Company. If you want to start a shoe company, better learn from these companies’ mistakes! The Walking Company is a maker of comfortable walking shoes. .
In March 2018, they filed for Chapter 11 bankruptcy. That was even before Rockport filed for bankruptcy. However, it wasn’t the first time for The Walking Company to file for bankruptcy. Ten years ago, it also filed for Chapter 11. However, this store has a happy ending – it came out of bankruptcy in July
Kiko USA is a store that sells cosmetic products and is a subsidiary of a larger company called Kiko Milano. In mid-January, the beginning of 2018, Kiko USA filed for Chapter 11 bankruptcy. It plans to solve its financial problems by closing nearly all its stores in the U.S., or so it seems. Kiko has around 30 stores across the U.S., all of which are located in shopping malls.
Kiko USA is having problems within the U.S. but its international business is going from strength to strength. To rectify the situation in the U.S., Kiko USA has been negotiating with landlords to lower their rent and to terminate leases.
At the beginning of 2018, in January, another company, like Kiko USA, filed for Chapter 11 bankruptcy, the A’gaci, a womenswear retailer. When it did, it was in the middle of renegotiation its leases on 49 of its 76 stores. In the company’s press release, it said that around two-thirds of their expenses were related to the very high leases that they had to pay.
A’gaci emerged from bankruptcy in the summer of 2018. They said that they would be keeping 55 stores and 1,500 employees. The Texas-based company got approval to commit on a loan worth up to $12 million in June. So, unlike many companies on this list, it looks like A’gaci has a bright future ahead.
Toys R Us
The financial troubles of Toys R Us have been reported intensely in the media. It filed for bankruptcy in 2018 and it stated that it planned that all of its stores would be liquidated. That translated to huge clearance sales at its 735 stores across the U.S. Business Insider said that it planned to close all of its stores as fast as it could. This is because the longer they open, the more they would have to pay the landlords.
However, there are reports popping up that the brand is not dead yet. It was said that at the end of 2018, the Toys R Us ‘owners’ canceled its bankruptcy auction. This caused some news agencies to speculate whether it would actually gear up for a comeback or not.
This casual Italian restaurant chain filed for Chapter 11 bankruptcy in the spring of 2018. The Massachusetts-based restaurant closed around 15 of its locations in April, according to Associated Press. At that point, there were 59 restaurants located in 10 different states. Bertucci’s was acquired by Earl Enterprises, an Orlando Florida-based company for a staggering $20 million.
Earl Enterprises also has stakes on very popular brands like Earl of Sandwich, Planet Hollywood and Buca di Beppo, another Italian restaurant chain. Biz Journals said that the deal covered a $13 million debt, $4 million credit and $3 million cash. Biz Journals then continued to describe Bertucci’s difficulty in competing against other restaurants.
According to CNBC, this clothing company for children’s wear filed for bankruptcy protection in January 2019. When it filed, the retailer stated that it planned to cease operations on all of its Crazy 8 stores as well as all of its 800 Gymboree stores. In March, a few months after it filed for bankruptcy, the company announced that there were changes.
Gymboree’s brands had been acquired by another company! Their buyer? Children’s Place, a fellow distributor of children’s products. It bought both Gymboree and Crazy 8, according to CNBC. In addition, another company, the Gap, acquired the intellectual property of Gymboree’s Janie and Jack, its customer data, website, and more. Janie and Jack is one of Gymboree’s children-centric brand, which is quite well-known to consumers and their little babies.
On March 5, 2019, this retailer of denim apparel filed for Chapter 11, Business Insider reports. In its bankruptcy court documents, Diesel stated that its declining wholesale orders were due to “general downturn in the brick-and-mortar retail industry,” as well as the decreasing net sales, expensive leases, and some instances of fraud and theft.
RetailDive state in an article released on March 5 that Diesel planned to reorganize as well as relocate some store locations “with a smaller footprint.” They also planned to rebrand, open a Miami pop-up shop, and open stores in locations which are strategically good for business. Some stores wouldn’t renew their leases. Hopefully, this reorganization works so all the denim fans can still buy their favorite Diesel products.
Imerys Talc America Inc.
This company might not ring a bell but it does supply talc powder for a big company that you might recognize – Johnson & Johnson’s. It is possible that Imerys’ talc powder may not appear in Johnson & Johnson’s powder products anymore. According to Bloomberg, the Paris unit of Imerys Talc America Inc. as well as two of its subsidiaries (Canada and Vermont units) filed for Chapter 11 bankruptcy in February 2019.
Imerys stated that the over 14,000 claims that it faces in the United States are the cause of its bankruptcy. Majority of the said claims came from women who believe that the talc powder that Imerys supplies is the cause of their ovarian cancer. Bloomberg also reports that other claims cite mesothelioma caused by asbestos in Imerys talc powder.
Pacific Gas and Electric (PG&E)
On January 29, 2019, this investor-owned electric and gas company filed for Chapter 11 bankruptcy as a result of the wildfires in California in 2017 and 2018. It is interesting to note that the company wants to approve around $235 million worth of bonuses for its employees. Will it affect the company’s bankruptcy issue somehow?
Senator Jerry Hill, the California state senator, said, “$235 million would go a long way to support the victims of last year’s wildfires.” The bankruptcy filing had put the claims from creditors and wildfire victims in limbo. We don’t really know much about utility companies but isn’t victim claims more important than employee bonuses?
We definitely hope that this company doesn’t become things forgotten! On February 6, 2019, Things Remembered filed for Chapter 11 bankruptcy, Business Insider reports. This company makes personalized keepsakes such as bags and wallets with a person’s name on it as well as engraved jewelry. They also produce products for you to keep your keepsakes in such as jewelry boxes.
Luckily, this personalized gift shop is still open to those who want to purchase personalized gifts. According to RetailDive in its March 11, 2019 article, the company was successfully sold to Enesco, a gift and home decor company. All of Things Remembered’s online, B2B retail operations, direct mail, as well as its 176 locations will retain the company’s name.
Innovative Mattress Solutions
On January 14, 2019, this Kentucky-based mattress company filed for Chapter 11 bankruptcy, Business Insider reports. Aside from Mattress Warehouse, Innovative Mattress Solutions is also the owner of Sleep Outfitters and Mattress King. On January 15, 2019, another retailer called Mattress Warehouse put out a press release to explain Innovative Mattress Solutions’ bankruptcy.
It states that although it has the same name as one of its subsidiaries, Innovative Mattress Solutions’ bankruptcy is not in any way related to it. The release states, “This filing of Chapter 11 bankruptcy has no bearing on the Mattress Warehouse (sleephappens.com) organization or their relationships with their vendors.” USA Today reports in January 2019 that Innovative Mattress Solutions might shut down 142 stores.
On March 11, 2019, the Los Angeles-based retailer Z Gallerie filed for Chapter 11 bankruptcy, according to Business Insider. SF Gate reports that this company that sells home furniture said it would close 17 of its stores and would look for a buyer to avoid liquidation. It states that the bankruptcy was caused by self-imposed problems (a common reason used in filing for bankruptcy).
SF Gate continued to state that Z Gallerie wished it had invested more in e-commerce and hadn’t invested so much on opening expensive distribution centers. Its business problems mainly came from the fact that its performance goals weren’t meant when they invested so much on their expansion. Z Gallerie needs a swift proceeding, as their filing would indicate, to avoid becoming another retailer to have failed reorganization attempts and then be forced to liquidate.
Business Insider reports that this giant beauty company filed for Chapter 11 bankruptcy on January 4, 2019. According to Kansas City Star, this brand from Kansas City sold some of its assets on the market. The article released on January 23, went on to state that Bob Bernstein, the advertising icon who invented the McDonalds Happy Meal, might purchase the company.
A Delaware bankruptcy judge said that Bernstein, who also happens to the one who originally launched Beauty, was the “stalking horse bidder.” This means that he could buy Beauty Brands if there was no better offer than his. Beauty Brands initially went into an asset purchasing agreement with Hilco Merchant Resources. Hilco was the stalking horse bidder before it was replaced by Bernstein.
Business Insider says that this Wisconsin-based retailer filed for Chapter 11 bankruptcy on January 16, 2019. Shopko planned to close 70 percent of its retail stores from February to May 2019 while it is reorganizing. USA Today states that the company would close 251 stores in February, leaving only 110 retail stores open. It planned to close fewer stores in December.
A company that closes stores would have to issue a Worker Adjustment and Retraining Notification Act. In this case, ShopKo would have to do it in both Illinois and Wisconsin. Michelle Hansen, Shopko’s spokeswoman said, “Through our conversations with the potential buyers, it has become clear that it is in our best interest to operate with a significantly smaller store footprint.”
The Weinstein Company
The public finally heard about the allegations of sexual misconduct done by the company’s co-founder Harvey Weinstein in October 2017 because of an article published by the New Yorker. The film executive was accused by a number of women, including actresses Ashley Judd and Rose McGowan. In March 2018, The Weinstein Company filed for bankruptcy.
It did find a buyer in May 2018, the Lantern Capital Partners, a private-equity firm based in Dallas. The New York Times reports that Lantern gave $310 million plus the assumption of a $115 million debt. The firm doesn’t have any experience in Hollywood but its portfolio includes a zinc recycling company as well as auto dealerships.