Mattress Firm almost closed its doors. In addition to the Retail Apocalypse statistics, Mattress Firm is the nation’s largest mattress company to file for Chapter 11 bankruptcy protection. Nevertheless, the Houston-based sleep chain made short work of it. Filing on October 5, 2018, just over a month later, all proceedings were in line.
To be exact, by November 11, 2018, executive chair and CEO Steve Stagner announced, “This is an exciting day for Mattress Firm as we emerge a stronger and more competitive company.” Its reorganization includes shuttering 700 underperforming stores, leaving a remaining 2,600 in operation. The company also secured a $525 million cushion for operations and growth within the agreement. Back to the business of beds.
J. Crew
One store at risk for a 2019 bankruptcy is J. Crew. Their problem? A $2 billion debt issue. Of course, they made some mistakes that caused shoppers to buy elsewhere, but, in the end, it added up to a net loss of $125 million for 2017. To put its debt issues in perspective, the company paid $30 million per quarter in interest payments to pay down its debt.
The Los Angeles-based company started out as a specialty catalog retailer. J Crew’s niche rugged outdoor wear designs caught on, and by the 2000s, the company offered brick-and-mortar stores. For some reason, they tried an upscale appeal, and their effort, like the proverbial last straw, sank the ship.
The Walking Company
The Walking Company is another comfort-wear shoe brand to succumb to a 2018 bankruptcy. However, this company walked away with most of its stores intact. It wasn’t the first bankruptcy filing for The Walking Company. In 2009 the company needed protection after a rapid expanse of stores met a lagging economy in the midst of the 2008 Financial Crisis.
Then, in 2018, it filed for what is becoming known as “Chapter 22 bankruptcy” as more and more companies are filing for a second bankruptcy. To confront competition from online e-tailing, The Walking Company launched a website. Since its 2016 acquisition, it has owned and operated the FootSmart website and catalog.
Brookstone
Brookstone survived a 2014 bankruptcy filing after a Chinese conglomerate, Sanpower, purchased it at auction for $173 million. But it didn’t survive the 2018 retail apocalypse. Or, as the company says, it could not overcome an “extremely challenging retail environment at malls.” Except for its 35 airport stores and Brookstone.com, the entire chain of 101 mall stores closed. The mall stop that gave shoppers a break to gawk over Brookstone’s quirky gadgets, or check out the massage chairs, is sorely missed. Brookstone helped launch brands like iRobot and Fitbit.
The novelty of the store’s originality has been made somewhat obsolete by the vast array of online products. The first store opening was in 1973. In the ‘90s Bain Capital, led by Mitt Romney, took the company public. In keeping the more profitable airport stores running, they were able to secure a buyer. BlueStar Alliance bought it out of bankruptcy for $72 million. The company plans to continue selling Brookstone gadgets on shelves at stores such as Macy’s, Bloomingdales, and Bed Bath & Beyond.
Payless ShoeSource
A double-whammy. In April 2017, Payless filed for bankruptcy and attempted to salvage the chain by getting rid of 700 stores and $435 million in debt. Its efforts tanked. By April 2019, all stores closed, as per a second bankruptcy ruling filed in February 2019. Two bankruptcies in less than two years.
What’s left of the company is $470 million in debt and 2,500 vacant shoe shops. Of note, the liquidation of all its stores is the largest liquidation event in U.S. retail history. E-commerce options for Payless Shoes also disappeared. The Topeka, Kansas, company had been selling shoes since 1956.