New approach to bankruptcy keeping companies alive
Since 2014, a total of 19 brick-and-mortar retail companies have shuttered their doors due to bankruptcy. As of late, more companies have been able to remain in business and keep their employees even after exiting bankruptcy. This is due in large part to a new method that has involved help from landlords, creditors and vendors.
Up until this year, retailers like The Sports Authority, American Apparel and The Limited all shuttered their doors once their bankruptcy was complete. Instead of taking on expensive leases and struggling businesses, investors decided to shutter these companies and instead attempt to rebrand them online.
Despite these moves, investors are taking a different approach to bankruptcy these days. They see some value in brick-and-mortar retail companies, leading them to find an opportunity if they can in an effort to reduce their losses in the retail world.
This new method could help to slow the job loss in the retail industry, which saw 6,000 stores close and 100,000 employees lose their jobs so far in 2017 and there’s still two full months remaining.
Perfumania and True Religion Apparel are both slated to exit bankruptcy in the near future and will have some of their stores still open for business. These two companies are following what Payless ShoeSource did in August. The company exited bankruptcy with 19,000 of its 22,000 employees and 3,400 of its 4,200 stores still open.
Struggling to remain in business can be an overwhelming feeling for companies of all sizes. Consulting with an experienced Chapter 7 bankruptcy attorney in Long Island can make the process just a little bit easier for all involved.
Source: Straits Times, “New US bankruptcy approach keeps stores, employees intact,” Oct. 09, 2017