A retailer in another state recently filed for bankruptcy. The company, Eastern Outfitters, is the parent company of Eastern Mountain Sports as well as Bob’s Stores, a discount chain. Its Chapter 11 bankruptcy filing is one of the latest filings made by retailers in the United States, including in Massachusetts, amid the increasingly competitive pressure that the sector is facing.
In its bankruptcy listing, the company listed liabilities and assets in the $100 to $500 million range. A private equity firm owns the company after acquiring Eastern Mountain Sports and Bob’s Stores through a 2016 bankruptcy involving a retail group that previously owned these store chains. The private equity firm that owns Eastern Outfitters reported that the company’s annual revenue at that time was a whopping $400 million.
Another investment of the private equity firm, Wet Seal, intends to close its more than 170 stores as well as lay off a total of 3,000 staff. Other retailers that submitted bankruptcy filings in 2016 include American Apparel, Aeropostale and Sports Authority. A sportswear retailer has been talking with Eastern Outfitters about offering a stalking-horse bid in an auction that takes place as part of the bankruptcy.
In today’s competitive business climate, keeping one’s assets above one’s liabilities can be challenging for companies, especially for retailers. However, it is often possible to reorganize debt while keeping an existing business alive by going through the process of Chapter 11 bankruptcy. With this type of filing, a business owner in the state of Massachusetts can get a much-needed fresh financial start and exit the bankruptcy process ready to achieve new growth.
Source: Fortune, “Eastern Mountain Sports’ Parent Is Latest Retailer to File for Bankruptcy“, Feb. 6, 2017