Dive Brief:

• Gadget and gift retailer Brookstone is searching for a bankruptcy loan ahead of a possible Chapter 11 filing, according to a Wall Street Journal report that cited unnamed sources. Brookstone did not immediately respond to Retail Dive's request for comment.
• The company, which went through a bankruptcy in 2014, is looking for $50 million to $60 million in financing, the Journal reported, adding that a "[C]hapter 11 filing could happen shortly after it nails down the financing."
• Reuters reported in June that Brookstone was exploring its restructuring options, including a potential bankruptcy. The Journal reported on Friday that the financing efforts were still "fluid" and a bankruptcy is not certain. Among other options, it could close unprofitable stores, though it would likely keep some open, including its airport locations, according to the newspaper.

Dive Insight:

As a largely mall-based retailer —  known for its oddball electronics, gifts, travel gear and other assorted doodads — Brookstone faces the same traffic problems as other mall chains. "They're in like every friggin' mall," Lauren Bitar, director of retail consulting at RetailNext, told Retail Dive in an interview last fall. "If it wasn't Sharper Image, it was Brookstone."

Traffic declines in C- and B-class malls are especially acute for a retailer like Brookstone, whose curiosities and novelties might draw people in to look, but not always to buy. At the same time, the retailer depends mightily on those malls, especially during the holidays, when traffic rises with the tide of gift givers who say to themselves, as Bitar put it, "'Oh God, I need a last minute thing — there's Brookstone!'"

Today the retailer lists around 130 stores open in the U.S., including airport locations, on its store locator. Until recently, Steven Goldsmith — who has served as an executive with The Shopping Channel, Sears Canada and what is now L Brands — ran Brookstone as CEO. According to his LinkedIn page, Goldsmith left Brookstone in April for the luxury brand LXRandCo. The company doesn't currently list a CEO.

Brookstone began as a direct marketer, placing its first advertisement for "hard-to-find-tools" in Popular Mechanics in 1965. After growing a catalog business, Brookstone opened its first brick-and-mortar store in New Hampshire in 1973. In 2014, the retailer was nearly sold in Chapter 11 to the parent of Spencer's, a fellow seller of unique (and amusingly nonessential) wares. Instead, it went to a joint venture between the China-based firms Sailing Capital and Sanpower Group for $174 million.

Even a second bankruptcy filing — which would put it in a league with RadioShack, American Apparel, Wet Seal, the Walking Company and others that have made second trips to Chapter 11 — would not necessarily spell doom for the retailer. What is critical is that the company secure a plan and financial backers in bankruptcy, as well as close unprofitable stores.

But the dramatic changes to mall shopping over the past decade cast uncertainty over Brookstone's model in the U.S. Bitar said last year that moving away from electronics — where the company faces heady competition from Amazon and other online players — could help Brookstone secure a place in the world going forward. The company this year also launched a new platform to give makers and tech brands access to its physical locations to lure brands in and help them with product testing.

Michael Dart, a partner in A.T. Kearney's private equity practice and author of the upcoming book Retail's Seismic Shift, told Retail Dive last year that Brookstone's airport locations could also give the retailer an advantage. "It's a way of reaching a different kind of consumer with a product that's actually a tougher sell, that probably wouldn't get purchased if someone didn't go in and see it and feel it," Dart said.