The Tannery is a well-known Boston shoe retail store that has been in business for over 43 years. Unfortunately for shoe lovers in Massachusetts, the owners of the The Tannery and The Tannery Outlet filed for Chapter 7 bankruptcy in the last week of June. This is a big blow to the iconic store that sells men’s and women’s shoes, clothing, outerwear, and accessories.
Both Companies have not yet submitted to the bankruptcy trustee the necessary financial statements, yet both could owe anywhere up to $10 million to 50-99 creditors according to their initial bankruptcy filings. Their creditors of The Tannery include a who’s who of shoe designer’s including Adidas, Ugg, Dolce & Gabbana, New Balance, and Patagonia.
If you have kept up with similar retail bankruptcy cases this year, you’ll notice one distinct difference in The Tannery’s case: it’s not filing for Chapter 11 bankruptcy which is much more commonly used for companies seeking debt relief from creditors. While not a well-known face, Corporations and LLCS that are going out of business can use Chapter 7 bankruptcy to liquidate their business for efficiently. When a company files a chapter 7 bankruptcy the business does not receive a discharge. Because the business is a separate entity from the owners, the business, not the individual business owners, liquidate the company’s property in order to satisfy creditors.
The company maintains that they are not going out of business, however the bankruptcy trustee is seeking to liquidate the company’s inventory at a public auction in order to satisfy the company’s debts. While the future of Boston’s largest independent retailer of footwear and designer apparel hangs in the balance, it’s not a surprise that the company was forced to close a third location last year as they join the list of retailers seeking financial relief as they deal with consumer shifts and e-commerce disruption.