It might be a bit sad to say adieu to your favorite companies, but the world of business is a tough one indeed. There are times when the downfall is caused by outdated products or the convenience of online shopping. At any rate, there is little we can do when they come to the decision to shut down stores and apply for bankruptcy. Can you guess which retailers we are saying goodbye to this year? Read on to see if you got any of them right.
Did you know that former FLOTUS Michelle Obama is a big fan of J. Crew? We bet she is going to be sad to hear that it is going to be closing several stores due to declining sales in recent times. The company has shuttered its bridal store and even let go of creative director Jenna Lyons and CEO Millard “Mickey” Drexler. The latter said the act of raising prices caused problems for the company.
Sears Holdings has been suffering a number of problems for nearly a decade now as sales continue to go down. The company has tried just about everything to keep its head above water. It has cut costs, sold assets, closed stores, and laid off employees. According to RetailDive, the department store chain continues to suffer after doing all of these things. In October 2018, Sears Holdings filed for bankruptcy and closed down 142 stores. CEO Eddie Lampert took out hundreds of millions of loans from a hedge fund he owns. Things continue to look bad for the company, however.
99 Cents Only
99 Cents Only has found itself in deep water since it could not compete very well against Walmart, Dollar General, and Dollar Tree. In December 2017, it reported a $27.1 million net loss. Aside from that, it also incurred $8.8 million in the first quarter and then $33.6 million in the following quarter. The company was sold to Ares Management and then to Canada Pension Plan and then to a private family. Jack Sinclair also replaced Geoffrey Covert as CEO. Despite everything, it remains in the game.
RetailDrive reported that GNC had a 3.4 percent revenue drop in 2017. All of this happened in conjunction with its $1.3 billion debt. The GNC chief executive said the company fared well in e-commerce and China in Q2 of 2018. Despite this, it also reported that the top-line saw a drop in profits and sales in the same quarter. The company plans to sell 40 percent of the shares to a Chinese pharma retailer who will then produce, distribute, sell, and promote the products there.
In May 2018, the company reported that it saw a 4.3 percent drop in gross sales the previous year. It tried to launch a thousand USA stores, which is a big increase from its 600 stores. Plans did not push through, however. In February 2018, the CFO quit and was replaced by a former media executive. The company was then put on the market. It also sold the specialty pharmacy CVS for the price of $40 million.
Destination Maternity is one of the biggest presences in the industry of maternity apparel. It has over a thousand stores, although the CEO left last year when the sales declined by more than 7 percent. They sought help from Berkeley Research Group, who speculates that the misfortunate is the result of ending the partnership it had with Kohl. In 2017, sales declined by 6.4 percent. It seems like the future of the line lies in e-commerce as this part saw a 40 percent increase despite everything.
Ascena Retail is the parent company of Ann Taylor, LOFT, Dress Barn, and Lou & Grey. Hiring a new chief did not do much for Dress Barn, however. In an attempt to keep things afloat, it will close 25 percent of its stores by 2019. Ascena expected to see sales of $1.7 billion in 2017, but the top-line sales only dropped. Financial services business Moody’s later said Ascena “is on a path to developing a strong ‘backbone’ of retail capabilities.”
Stein Mart has been struggling but things are looking up. It managed to offset sales when digital revenue saw a 47 percent increase in 2017. The company reported a $23.4 million loss in bottom-line sales, although this went down by 10 percent. Our favorite store seems to be here to stay. In March, it got a $50 million term loan that could be used to further improve its situation.
Although JC Penney continues to fare better than Sears, it still has a long way to go. It had to shut down a distribution center and lay off a lot of employees in the past year. The top-line sales experienced a 0.3 percent decrease with its $116 million income in 2017. It is partly struggling thanks to its debt worth $4.2 billion. Investors are apparently fed up with the progress. Let us hope that changing its execs will help.
Office Depot had a rough time in 2017 after its sales dropped by 7 percent to only $10.2 billion. Its CEO announced that it would start offering services as well, which seems to be going well for the top-line. It came up with the “BizBox”, a subscription program, and acquired an IT firm called CompuCom.
Vitamin Shoppe is also dealing with a lot of problems right now. It has decided to focus on e-commerce and launched a subscription service. However, it still experienced a top-line sales decline of 8.5 percent in 2017. It seems like the number of competitors and declining foot traffic in malls is to be blamed. We hope they can turn the tide by doing events, launching delivery services, and expanding categories.
Neiman Marcus experienced a 5 percent decline in top-line sales in 2017. It has been trying out new things that seem to work. Regardless, the interest expenses continue to take a toll on the company. Hudson’s Bay thought about acquiring the luxury clothing retailer, although it did not work out since they worried too much about the declining sales of the company.
This fashion retailer saw a decline in sales after the divorce between founder Manny Mashouf and creative director Neda Mashouf. Aside from her decision to leave the company, the decline of malls caused the situation Bebe is now in. It saw an estimated loss worth $4.6 million in 2017. They tried to address the problem by eschewing retail space. The company paid $65 million to shut down operations and turn to e-commerce.
Pier 1 Imports
Jeffries reported that 2018 was going to be “heavy investment year” for Pier 1 since it was going to be taking over its “sourcing, merchandising, pricing, marketing, store ops, e-com, and supply chain.” In Q1 of 2018, it saw a 9.2 percent net sales decline. The credit rating of Pier 1 received a downgrade from S&P Global analysts. The 10 percent tariff on China also worked against them since the majority of their products are made over there.
Land’s End is apparently facing problems because of its connection to Sears. In 2013, Sears opted to go into a different direction. While the sales of Land’s End item are going strong, former CEO Federica Marchionni made mistakes. One of these was with its Canvas brand, which failed to attract the target audience even though it offered clothing in “designer styles to relaxed looks.”
Guitar Center had just one year to pay its $900 million debt when 2018 rolled in. This instrument retail company experienced a 36 percent decrease in the sales of electric guitars from 2005 to 2016. While this looks bad, they still plan to open new stores. They are out of hot water now since they got emergency loans.
Winn-Dixie has been suffering because its parent company filed for bankruptcy to restructure loans. It shuttered nearly 100 stores and paid off about $600 million in debt. The company wants to focus on remodeling and rebranding in the meantime. It seems like it is suffering from competition from both big-box stores and online retailers.
Nine West has accrued debt worth $1.5 billion but is now negotiating and restructuring it. It has sold parts of the empire and filed for bankruptcy. It has stopped operations in nearly all its Easy Spirit stores save for 25. It now plans to focus more on clothing and jewelry and its other brands like Anne Klein, One Jeanswear Group, and Kasper Grouper because the demand for footwear continues to go down.
These days, fewer women are interested in pricy weddings and dresses. That might be the reason behind the downfall of David’s Bridal. The company has a $520 million loan to pay off in 2019 and $270 million more next year. Scott KEY, the new CEO, is looking for ways to refinance these debts since the sales and profits have been going down. On top of that, S&P Global lowered its credit rating in June 2018.
Bon-Ton might be around since the turn of the century, but it filed for Chapter 11 last year before it was sold and liquidated. In October 2018, it reopened its e-commerce site and announced plans to reopen. USA Today said, “The reinvented Bon-Ton would be sleeker, more e-commerce focused business.” The company’s decline was brought about by Amazon changing the industry.
One of the most common reasons companies file for bankruptcy is its failure to adapt to consumer demands. Tops Market went into a decline because food prices dropped and non-traditional food retailer and competitors popped up. It remains open, but it might be due for a comeback soon. The company recently got out of $80 million annual interest that was due in 2017.
Cole Haan was included in the USA Today list of at-risk companies in 2018. Formerly owned by Nike, it used to be known for its comfortable dress shoes. After it was bought by Apax Partners in 2013, it had to compete with its former parent company. Sadly, it has yet to rise back to its old status…
This March, Charlotte Russe made it known that it was going to be liquidating and stopping operations. I February, it filed for bankruptcy and planned to close shop in 94 locations. It then became 500 stores because a liquidator won the bid in court. It was the victim of declining mall foot traffic, unfortunately.
If you were ever a girl, you are likely fond of Claire’s. Unfortunately, it has since ceased IPO, which is why its 2018 bankruptcy filing felt imminent. The company filed for Chapter 11 in March 2018 and hoped to decrease its debt by nearly $2 billion. It closed 130 stores by May 18 and is now looking for buyers.
FullBeauty Brands Holdings Corp
FullBeauty owns several plus-size brands out there. Like others, it blames Amazon for the decline in its sales. Apax Partners, its owner, included this when they sent messages to their lenders back in 2017. That year, it saw a revenue decrease of 30 percent in just the first quarter. It has since changed things up in the FullBeauty executive lineup, so let us hope things improve.
Eddie Bauer has some issues with debt and keeping up with trends. In 2017, its owner Golden State Capital thought about selling it to solve its issues. S&P Global lowered its credit ranking that same year. In 2009, it already faced the same problem, which was when Golden State Capital came to its rescue. A merger with Pacific Sunwear is in the talks, so let us see if this will actually happen…
Bluestem Brands made it to Business Insider list of at-risk companies. In June 2018, BusinessWire revealed that the company suffered a sales decline in 2017. Its net sales had a 10.9 percent decrease, which did not even account for the 5.1 percent drop in its exited businesses. What will happen next?
This retailer is a giant in the field of pet products, although it has a debt problem of $8 billion. Reuters said none of them will mature before 2022. Its problems have to do with e-commerce, just like the other retailers we talked about. It has bought its own e-commerce site by the name of Chewy. The company paid $3.35 billion, which is the highest amount any company has spent on e-commerce.
In 2017, Payless filed for bankruptcy, laid off employees, and shut down 600 stores. It managed to make a comeback after reorganization in August 2017. While it closed down a lot of stores, it still has 3,500 of them in operation. The CEO said, “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. runs over a hundred Burger King joints in Puerto Rico. Unfortunately, it made it to a list called Distressed Company Alert and received a “low rating”. S&P Global also downgraded its credit rating. A credit analyst said it was likely because of the economic problems Puerto Rico has been facing.
Mattress Firm filed for bankruptcy on October 5, 2018. The financial problems have been attributed to its accounting scandal and “an onerous store footprint.” It planned to put 700 stores on the market and stop operations in 200 more after the bankruptcy announcement. It is now trying to restructure.
National Stores filed for bankruptcy in August 2018. It also said it wanted to cease operations in 74 stores in Puerto Rico. People have speculated that its acquisition of various brands caused its debt and eventual bankruptcy. You will find its locations in open-air and stand-alone shopping centers.
Gump’s Holdings applied for bankruptcy when it failed to get a buyer. Its press release said that its hardships had been caused by an “overwhelmingly difficult retail environment”. Although it started Gump’s By Mail, it was hard to compete against Amazon. The company is still hoping to get bought out.
Brookstone also applied for bankruptcy in August 2018. It planned to shut down 101 stores across the country as well. Unfortunately, the declining mall foot traffic has also dealt a blow to its sales. Like Gump’s, it hopes to find a buyer but just for the e-commerce, wholesale operations, and airport shops.
In May 2018, Rockport Group filed for Chapter 11. However, it was soon bought out by Charlesbank Capital Partners. The acquisition was completed by July 2018. Let us hope that this private-equity company with a diverse portfolio will help get it back to its feet! No pun intended.
The Walking Company
The Walking Company is yet another bankrupt shoe business. The retailer of comfortable walking shoes filed for bankruptcy in March 2018. However, this was not its first time to do so as it did the same thing a decade ago. Luckily, it was able to come out of it in only a matter of four months!
Kiko USA applied for bankruptcy in January 2018. It hopes to solve financial problems by shutting down its stores across the country, all 30 of which are located in malls. The good news is that its overseas locations are going strong. Kiko USA is currently trying to talk with landlords to negotiate the rent.
At the beginning of 2018, womenswear retailer A’gaci filed for Chapter 11. It had been trying to renegotiate leases on 49 stores at the time. During the press release, it explained that two-thirds of the expenses went to leases. In the summer of 2018, they were able to go out of bankruptcy and even got approved for a $12 million loan. Whew!
Toys R Us
Toys R Us applied for bankruptcy in 2018 and said it was going to liquidate all stores. That was why it held big sales at the 735 American stores. Of course, it wanted to shut them all done to prevent paying the lease. However, the owners canceled the bankruptcy bid in 2018 so a comeback might be in the works.
This Italian restaurant chain filed for bankruptcy in the spring of 2018. The restaurant closed 15 locations in April. It was bought out by Earl Enterprises for $20 million. Biz Journals reported that they paid $13 million in debt, $4 million in credit, and $3 million in cash. Let’s hope things work out.
Gymboree filed for Chapter 11 at the beginning of this year. After filing, the retailer said it wanted to stop operations on all the Crazy 8 and Gymboree stores. Things changed by March, however, as the brands were then bought out by Children’s Place. The Gap also its website, customer data, and more.
Diesel USA applied for bankruptcy on March 5, 2019, because of the “general downturn in the brick-and-mortar retail industry”, declining net sales, high leases, fraud, and theft. It also wanted to reorganize and relocate to places “with a smaller footprint.” Let’s hope that reorganization does wonders for it.
Imerys Talc America Inc.
Imerys Talc America provides talc powder to Johnson & Johnson’s. It filed for bankruptcy in February 2019, which must have something to do with the more than 14,000 claims it had. Many women blame the company for causing ovarian cancer. Apparently, the asbestos in the powder caused mesothelioma.
Pacific Gas and Electric (PG&E)
The electric and gas company filed for bankruptcy on January 20, 2019 because of the California wildfires in 2017 and 2018. The company is planning to approve $235 million in employee bonuses despite everything! Senator Jerry Hill said, “$235 million would go a long way to support the victims of last year’s wildfires.” Maybe the company needs to get its priorities sorted out…
Things Remembered will forever live on in our memories! It applied for bankruptcy on February 6, 2019. The company is known for personalized gifts and keepsakes. However, there is no need to worry as it was purchased by a gift and home décor retailer called Enesco.
Innovative Mattress Solutions
Innovative Mattress Solutions filed for Chapter 11 on January 14, 2019. There was a bit of confusion as another retailer shared the same name as one of its subsidiaries. Innovative Mattress Solutions then clarified everything by saying, “This filing of Chapter 11 bankruptcy has no bearing on the Mattress Warehouse (sleephappens.com) organization or their relationships with their vendors.” Anyway, the company plans to close 142 stores.
On March 11, 2019, Z Gallerie, an LA-based furniture retailer, applied for bankruptcy. Its plans were to shut down 17 stores and look for a buyer so that liquidation does not have to happen. The bankruptcy was reported to happen thanks to self-imposed issues. Perhaps they would be better off if they did not invest in distribution centers and focused on e-commerce instead.
Beauty Brands applied for Chapter 11 on January 4, 2019. Apparently, the beauty retailer sold some of the assets already. Bob Bernstein, an advertising icon who originally launched the brand, was reported to be the “stalking horse bidder.” He will end up with the company if no one comes up with a higher offer.
Shopko filed for bankruptcy on January 16, 2019. It planned to shut down 70 percent of retail stores from February to May 2019 as it reorganized. Shopko’s spokesperson Michelle Hansen 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
After the #MeToo movement erupted, co-founder Harvey Weinstein was put in the line of fire. The Weinstein Company ended up filing for bankruptcy in March 2018. Two months later, a private-equity firm called the Lantern Capital Partners bought it out for $115 million debt assumption and $310 million.