If you’ve flown on a US commercial air flight or had a sore back while at work, chances are that your flight or office hours were made more comfortable by some gadget from Brookstone. The stores have become a staple of the airport or mall scene over the last decade, earning a dominating market position in travel, massage, sleep and wellness, audio and tech, and fitness products. All isn’t well, however, within the New Hampshire based retail store, as the company announced today that it would be filing for its second Chapter 11 bankruptcy within 4 years.
Second Chapter 11 Bankruptcy
Brookstone originally filed bankruptcy in 2014 when it missed a debt obligation in the form of interest payments to bondholders; a sum totaling $125 million. Thanks to investments from a wealthy Chinese conglomerate and investment firms, the company was sold and allowed to exit Chapter 11 bankruptcy the same year.
Using Chapter 11 to Strengthen the Business
The idea behind filing for Chapter 11 bankruptcy protection is to strengthen a company’s balance sheet, renegotiate with bondholders and lenders, and, in some cases, get rid of portions of the business that aren’t working. In its press releases addressing the bankruptcy, Brookstone disclosed that they would be closing all Brookstone mall locations across the country in an effort to focus on their online sales and airport stores. Given the onslaught of retail electronic store bankruptcies such as HH Gregg, Radio Shack and Circuit City who were forced to close when faced with having to compete with online retails sales of internet giants such as Amazon and Walmart.com, closing the mall retail stores may be a bright move on the part of company leadership.
Other Texas Retail Bankruptcies
The rising costs of leases and inventor, combined with escalating online sales, have forced numerous retail stores to exit their brick and mortar investments in shopping malls. Texas malls, following national trends, are going through an odd change in which shoppers have changed their purchasing behaviors and no longer come in droves to purchase higher priced retail goods. Additionally, Millennials in America have also changed the way they eat dinner, opting more often to cook meals versus eat at restaurants, causing a major shortage in hospitality and dining chains across Texas as well. A few of the primary mall stores that Texas is seeing less of or are gone completely due to bankruptcy include, Gymboree, Rue21, Bon-Ton, Claire’s. The San Antonio bankruptcy of A’Gaci struck Texas shopping malls especially close to home in February 2018.
Bankruptcy in Texas
Like companies, individuals can become overwhelmed by debt and lack of positive income to pay back creditors when payments are due. Because the US Congress understood this, US Bankruptcy laws have been established that allow debtors to obtain a second chance at arranging their finances in a manner that allows them to once again met debt obligations while maintaining an average standard of living. If you’re struggling with debt contact a Dallas bankruptcy attorney to discover if bankruptcy protection is in your best interest.