A chain clothing store recently decided to file for bankruptcy. The move to file for Chapter 11 bankruptcy protection came after The Limited, which sold women’s apparel, closed all 250 of its brick-and-mortar stores. This is just one retailer that has fallen victim in recent years to online competition and changing tastes among customers in Massachusetts and elsewhere.
The retailer started out as one store over half a century ago. It ended up having to close its doors due to declining traffic in malls, slipping sales, costly leases and the move toward shopping via the internet. Other retailers that have filed for bankruptcy during the past year are American Apparel, Vestis Retail Group, Sports Authority, Aeropostale Inc. and Pacific Sunwear of California Inc.
Macy’s Inc. and Sears Holdings Corp. are planning to close many physical locations this year as well. Meanwhile, Amazon, a major online retailer, recently announced that it will add a whopping 100,000 jobs in 2017 to speed up deliveries. Although The Limited has closed its stores, a private equity firm’s affiliate has agreed to offer a bid of $25.75 million for the retailer’s intellectual property, including its social media accounts, trademarks and website address.
With Chapter 11 bankruptcy, a company facing monetary struggles due to heavy debt burdens can reorganize its business assets and debts. A Chapter 11 bankruptcy, however, is typically more complicated than other types of bankruptcy filings. An attorney can guide a business owner in Massachusetts through the process of filing for this type of bankruptcy protection. Whether the focus is to reorganize debt for continued operations or to provide enough time to consummate a sale, this type of bankruptcy may be just what is needed to support a struggling business.
Source: Reuters, “Women’s apparel retailer Limited Stores files for bankruptcy“, Arathy S. Nair and Tom Hals, Jan. 17, 2017