The List of Suffering National Retailers That Filed Bankruptcy in 2017
With more than 20 big-name retailers filing for bankruptcy in 2017, walking through a mall sure can feel like being in a graveyard. Most of these ailing brick-and-mortar retailers cited the strong online shopping trend as their downfall, proving the Amazon effect is stronger now than ever. Are we at the height of the retail apocalypse, or will 2018 prove to be worse yet for struggling retailers?
Many of these suffering retailers survived – for now. It remains to be seen whether those that emerged from 2017 Chapter 11 bankruptcies can thrive in an Amazon-centric market. In addition, history doesn’t favor successful retail bankruptcies, with around half of them ending in liquidation. In this day and age, retailers need to be nimbler than ever to keep up with the ever-changing landscape. Here we’ll take a look at 15 big-name retailers that filed bankruptcy in 2017 and where they stand now.
1. Charming Charlie
In December 2017, women’s accessories store Charming Charlie filed for Chapter 11 bankruptcy. The retailer, known for selling jewelry, purses, and scarves sorted in sections by color, planned to close 97 of its 375 locations. The struggling retailer said it intends to move forward with a “back-to-basics” strategy.
Next: A popular toy chain is suffering.
2. Toys R Us
Iconic toy retailer Toys R Us made big headlines in September when it filed for Chapter 11 bankruptcy, creating the third largest retail bankruptcy of all time. While the company reported having more than $5 billion in debt, it claimed all of its 1,600 locations, including Babies “R” Us, would continue to operate as usual. The sky-high debt was attributed to a leveraged buyout in 2005, when the company went private. Toys R Us increasingly competes with online retailers in its two main lines of business: baby goods and toys.
Next: A shoe store will exist mainly online.
Unlike some others on this list, when Aerosoles filed for Chapter 11 bankruptcy in September, it planned to close most of its stores and focus on its wholesale, e-commerce, and international businesses. Only 4 of its 78 stores were to remain open. The troubled retail chain blamed its bankruptcy on the decline in mall traffic, industry-wide markdowns on merchandise, and shopping patterns shifting to online. Assets listed were $10 million to $50 million, with liabilities reported of $100 million to $500 million.
Next: A health store had unhealthy sales.
4. Vitamin World
Having filed for Chapter 11 bankruptcy in September, Vitamin World announced in November it planned to close more than 124 of its 345 stores nationwide and sell the remainder of the company. It blamed its troubles on ingredient availability disruptions, high rents, and underperforming retail stores. The company reported being more than $43 million in debt.
Next: Will this retailer come out smelling like roses?
Perfumania closed 65 of its 226 stores after it filed Chapter 11 bankruptcy in late August. At that time, it reported $254 million in debt and released stockholders for $2 a share. The ailing company planned to focus more on being a digital retailer. In October, the retailer exited bankruptcy and became a private company controlled by the family who created Perfumania back in 1980.
Next: Don’t mess with an angry bride.
6. Alfred Angelo Bridal
One of the more dramatic retailer bankruptcy stories of 2017 is that of Alfred Angelo. The bridal gown retailer abruptly closed all of its 60 stores when it filed for Chapter 7 bankruptcy in July. The move caused an uproar among brides who were left without dresses for which they had paid. “Alfred Angelo is closing its door tonight at 8 p.m.,” one bride-to-be tweeted on July 13, 2017. “I have no dress, no refund, and no time frame of when or where my dress will arrive.” The failed retailer, which had been in business for more than 80 years, issued a statement in August that it would not be able to fulfill its remaining customer orders.
Next: A retailer known for its jeans
7. True Religion
When apparel company True Religion filed for Chapter 11 bankruptcy in July, it reported $471 million in long-term loan debt. In October, the company emerged from bankruptcy protection with a debt reorganization plan reducing its long-term loans to $113.5 million. CEO John Ermatinger said the plan cleared the way for the company to grow its retail operations and digital presence.
Next: A kids’ clothing retailer shuttered one-fourth of its stores.
Struggling children’s clothing retailer Gymboree filed for Chapter 11 bankruptcy in June. The company, which cited $1.4 billion in debt, buckled under declining mall traffic, the cost of store rent, and online traffic. In October, Gymboree emerged from bankruptcy, closing and liquidating 330 underperforming stores of its 1,281 in total. Most of the closures were the lower-priced Crazy 8 stores and namesake Gymboree stores. The high-end Janie and Jack stores have been profitable for the company.
Next: A teen store that boasted “feel good” prices
Teen clothing retailer Rue21 says its mission is to make fashion everyone’s playground with “feel good” prices. Business was suffering, however, and the company filed for Chapter 11 bankruptcy in May. The ailing retailer emerged from bankruptcy in September, having closed 420 stores total, leaving 758 stores open in 45 states. Like most other struggling retailers, the company cited problems such as a general downturn in the retail industry, increased operating costs, and the shift from brick-and-mortar to online shopping.
Next: A discount shoe seller focuses online.
10. Payless ShoeSource
Budget-friendly shoe retailer Payless sought Chapter 11 bankruptcy protection in April, with plans to restructure debt and boost its balance sheet. It planned to close up to 800 stores. The company was the first of a crop of spring Chapter 11 filings to emerge from bankruptcy. The retailer is now working to bring “click-to-brick” and ship-to-home capabilities to its stores, CEO Mike Vitelli said.
Next: A store stuck in the 1980s?
“The 80s called. They want their store back,” a cashier says in a self-deprecating 2014 Radio Shack commercial, in which it was proclaimed, “It’s time for a new RadioShack.” Fast forward three years, and the ailing company found itself in a second Chapter 11 bankruptcy. Started in 1921 and once a go-to place for electronics, the retailer has become decreasingly relevant in the digital age. The company planned to shutter 200 stores and was evaluating options for the remaining 1,300 stores.
Next: A store that faced too much online and offline competition.
12. Gander Mountain
Outdoor retailer Gander Mountain filed for Chapter 11 protection in March and closed 32 stores. This was after the retailer had trouble taking advantage of a boom in gun sales and competition from Cabela’s, Bass Pro, and Amazon. The company came back from bankruptcy in December 2017 as “Gander Outdoors.” New owner Camping World has begun opening stores with the new name. The company said it plans to open 55 to 65 such new stores in the next year.
Next: An electronics retailer closed all its stores.
Electronics and appliances retailer Hhgregg filed for Chapter 11 in March 2017, after four years of declining sales. The Indianapolis-based company ultimately closed all 220 stores after it failed to find a buyer in bankruptcy court.
Next: A teen clothing store files its second bankruptcy.
14. Wet Seal
Maybe it’s because fewer teenagers are hanging out at the mall these days, but a number of teen clothing retailers struggled financially in 2017, including Wet Seal. After having filed for bankruptcy back in 2015, the ailing retailer filed for a second bankruptcy in February 2017. This came after reports the company had closed all stores when it was unable to secure a buyer. Although stores may be all closed, customers can still buy clothing on Wet Seal’s website.
Next: A women’s retailer says goodbye to offline stores.
15. The Limited
Women’s clothing retailer The Limited shut down all of its 250 stores in January 2017 and filed for Chapter 11 bankruptcy soon after. Shoppers can still buy merchandise on The Limited’s website, since private equity firm Sycamore Partners bought the retailer’s e-commerce business in February. “…this isn’t goodbye,” the company said in a statement. “The styles you love are still available online – we’re just a quick click away 24 hours a day.”
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