Bankrupt iconic retail chain begins liquidation, closing stores
A historic chain that operates under three big brand names will be closing all of its stores.
When money gets expensive, it becomes very hard for a struggling retail chain to recover.
Even when a lender can be found to keep the doors open, the added cost of servicing that debt makes it hard to make any changes, A number of retailers including Party City and Forever 21 managed to emerge from a Chapter 11 bankruptcy with new funding.
Related: Huge home improvement company files Chapter 11 bankruptcy
Both companies came out of bankruptcy with an operating plan. Party City had an aggressive plan that involved stores in new locations and pivoting part of its business model.
The problem is that making changes is expensive, and adding debt to a business model that already wasn't working doesn't leave enough cash to actually make big changes. These companies, and a handful of other recently bankrupt retailers, may have had the right idea about operational changes, but the cost of their debt killed them well before they got a chance to make those changes.
In many cases, a Chapter 11 filing merely delays the inevitable. The company gets some cash and some financial relief from its vendors, but its underlying problems don't get solved.
Iconic Canadian chain closing down
While Hudson's Bay may not be a brand name known to most Americans, it's a leading retail chain in Canada. The company also operates three Saks Fifth Avenue stores and 13 Saks Off 5th locations under a licensing agreement.
Canada's oldest retail chain, Hudson Bay, operates 80 stores in addition to the ones it licenses. It has run out of money and court documents show that it faces a very bleak future.
