2017: The Year of Retail Bankruptcies
Studies show that more people are turning to online retailers to find the latest fashion, accessories and technology in 2017. Because of this shift in foot traffic, retail stores are filing for bankruptcy at a staggering rate.
Just a few weeks before filing Chapter 11 bankruptcy, The Limited clothing stores closed its remaining 250 stores nationwide. On top of losing two of its top CEO’s in 2016, the brand had been struggling to find relevance in the ever-changing fashion community. As of January 17, 2017, The Limited brand has been purchased by Sycamore Properties, allowing the brand to join a portfolio that includes Belk, Hot Topic, Nine West and Talbots.
As of 2017, Vitamin World has filed for Chapter 11 bankruptcy with plans to close 51 of its 335 stores nationwide. On top of underperforming sales, the company struggled with “significant supply chain and availability issues” which became apparent after its 2016 buyout by NBTY, inc. According to Vitamin World’s CEO, the chain will not be going out of business and will continue to serve customers for years to come.
In April, Rue 21, a teen apparel store, announced that it would be closing nearly ⅓ of its stores in an effort to downsize the company’s physical footprint. Unfortunately, downsizing wasn’t enough, and on May 15th, Rue 21 filed for Chapter 11 bankruptcy with plans to reduce debt and keep the company alive. Rue 21’s situation mirrors the challenges that other mall-based junior apparel companies have faced- over expansion, declining mall traffic and lack of turnaround support.
Sam Henry Law does not handle Chapter 11 bankruptcies.
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