Discount store company seeks Chapter 11 bankruptcy protection

| Aug 17, 2018 | Chapter 11

National Stores Inc., a company that operates several discount housewares and apparel stores, recently determined that it was in a poor financial condition. It has thus decided to file for Chapter 11 bankruptcy protection. The company operates stores such as Factory 2-U as well as Fallas, which has had several locations in Massachusetts.

National Stores Inc. is a family-owned business that was established in 1962. Officials said they intend to shut down 74 of their 344 stores. The company now employs over 9,800 people across the United States. They said that one of the reasons for the bankruptcy filing is the current negative retail environment that has plagued so many retail shops during the past several years.

Other contributing factors to the bankruptcy filing include the expense of the purchase of a 78-store chain on the East Coast back in 2014. The company also apparently lost revenue as a result of Hurricanes Maria and Harvey in 2017. In addition, a data breach exposed over 550,000 customer cards’ data in 2017.

Officials said that after the bankruptcy filing, the company should be able to compete more effectively even as the industry continues to involve. The company said that its stores are designed to support low-income, underserved communities. In these communities, people tend to shop based on price rather than trying to stay on top of fashion trends. The company’s products sell for about $5 each on average.

Sometimes, companies in Massachusetts and elsewhere struggle financially due to economic and market changes. However, Chapter 11 bankruptcy protection can help them to get back on the path to financial freedom. An attorney can help business owners to navigate the bankruptcy filing process both quickly and efficiently in the Bay State.