After Chapter 11 bankruptcy closing, retailer shares next steps
The beloved chain has already begun closing its stores and hopes for a last-minute rescue are bleak.
Retail chains that run out of money rarely get a happy ending. Instead, they die a bunch of slow deaths as efforts to save the company become more and more futile.
At first, you get the inevitable changed, marketing, and other efforts to bring in more customers. Those efforts rarely have enough money behind them to actually have an impact, which changes the fate of the company.
Related: Another popular beauty brand files Chapter 11 bankruptcy
Somewhere in there, you get leader, ship changes, and bringing in people who have turned around other brands. Unless that comes with a big infusion of cash, that's almost never successful either.
Finally, you get the bankruptcy filing. In rare cases, that gives a company a chance to reorganize, get its debt under control, and reemerge with a workable balance sheet.
The problem is that right now, money is very expensive. That means that unless vendors and landlords offer very good terms, chances are a Chapter 11 bankruptcy filing, even a successful one, it's just one last gasp in a sad death march.
We have recently seen chains like Party City, and now, Joann fabrics emerge from Chapter 11 and tout their great futures. In reality, these chains come out of Chapter 11 barely able to operate and very little room for error.
