Oct. 21

Destination Maternity

Filing date: Oct. 21

Outcome: The maternity apparel retailer plans to close roughly half its stores and sell itself in bankruptcy.

Founded in 1982 as a catalog retailer catering to professional women in need of maternity clothes, Destination Maternity became a leading player in a niche market. But declines in the U.S. birth rate and expanded competition, along with mall traffic declines, knocked nearly a third off the retailer's top line. 

As it tried to turnaround, the company burned through five CEOs in as many years — each bringing his or her own strategy vision — and went through a bruising board fight. With liquidity drying up, the company put itself on the market this fall and found some interested parties. 

But Destination Maternity couldn't find a savior in time to stave off a full financial meltdown. By October, finances were so tight the retailer stopped paying rent on all locations and held back vendor payments. In Chapter 11 now, it plans to continue marketing itself and is eyeing a December auction for the business. 

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Sept. 29

Forever 21

Filing date: Sept. 29

Outcome: Forever 21 filed for Chapter 11 with plans to close up to 178 U.S. stores, scale back operations in Europe and Asia, and focus on Latin America and the U.S., including growing its e-commerce.

A bankruptcy filing for the fast-fashion retailer has been rumored for months, with the company reportedly hiring restructuring advisers in June. Some operations abroad, including in Mainland China, Taiwan and France, were shuttered even earlier. For years, Forever 21 was a fast-fashion juggernaut, doubling down on its cheap prices in 2014 with an even cheaper offshoot, churning out trendy looks that were here today, gone tomorrow.

But the company appears to have missed out on two key trends. In an era when sustainability is gaining traction among apparel consumers, Forever 21 has done little to appeal to them. And it bet heavily on brick and mortar rather than e-commerce; The company first launched online in 2005, and now some 16% of its total sales come from there, according to court documents.

The company has obtained $275 million in financing from existing lenders with JPMorgan Chase Bank as agent, plus $75 million in new capital from investment firm TPG Sixth Street Partners. But its troubles center around more than finances or channels, according to GlobalData Retail Managing Director Neil Saunders. "The long-term survival of Forever 21 relies on the chain creating a sustainable and differentiated brand," he said in emailed comments. "This is something that will be very difficult to accomplish in a crowded and competitive sector."

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Sept. 9

Fred's

Filing date: Sept. 9

Outcome: Fred's filed for Chapter 11 with plans to close all stores, liquidate its operations and sell off its remaining pharmacies.

Since April, Fred's has been shuttering stores at an accelerated rate, with successive announcements totaling over 430 closures. That represented most of the Southern discount and drugstore retailer's footprint.

Fred's had tried to turn itself around by focusing on higher-margin private label products, reducing SKUs, expanding its alcohol offering and tightening its budget. It has laid off hundreds of employees and sold major assets, including its specialty pharmacy business. But it wasn't enough to stabilize its spiraling finances.

Fred's filed for Chapter 11 in September with plans to close all stores, liquidate its operations and sell off its remaining pharmacies (about 170 in all).

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Aug. 16

Avenue

Filing date: Aug. 16

Outcome: Avenue filed for bankruptcy with plans to close all of its stores and sell its e-commerce site.

Avenue Stores went into bankruptcy with a plan to wind down all of its remaining 222 stores and sell its e-commerce operation. The filing came after the company, unbeknownst to employees and customers, opted to wind down its physical footprint and held a quiet auction for liquidators to run the going-out-of-business sales. 

The plus-size women's apparel retailer was formed more than 30 years ago from the spin-off of Limited Brands' combined Lerner Woman and Sizes Unlimited units. After spinning off from Limited, it was acquired by Redcats USA, filed for bankruptcy in 2012 and then bought out of bankruptcy by private equity firm Versa Capital Management.

Five profitable years followed. But new competition in the plus-size space from mass merchants and fashion stalwarts cut into sales while discounting, dwindling traffic, e-commerce and debt took their toll on the company. 

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Aug. 7

A'gaci

Filing date: Aug. 7

Outcome: The women's fashion brand plans to shutter all 54 of its stores in its second Chapter 11 filing.

A little over one year after A'gaci exited its first Chapter 11, it found itself back in bankruptcy court again. However, this time around the retailer has the intention of closing all of its stores. 

The San Antonio-based retailer began going-out-of-business sales in early August shortly after filing under Chapter 11 in the United States Bankruptcy Court for the Western District of Texas San Antonio Division.

At the time of its filing, A'gaci said it expects the majority of store closings to be completed by Aug. 31. 

Just prior to the retailer filing, it shut down its e-commerce operations, and updated its return and exchange policies. This came as social media users buzzed about notices and locked doors at several of A'gaci's physical store locations in Texas.

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Aug. 6

Barneys New York

Filing date: Aug. 6

Outcome: The department store stated in a press release that it will close stores in Chicago, Las Vegas and Seattle, along with five concept locations and seven Barneys Warehouse stores. Five locations, including its New York City store on Madison Avenue, will remain open. The day following the Chapter 11 filing the retailer announced that it secured $218 million from Brigade Capital Management, LP and B. Riley Financial, Inc.

In documents filed with the United States Bankruptcy Court for the Southern District of New York, Barneys revealed that all the stores closing have historically operated at a loss. Furthermore, the company has been short on cash and "operating without sufficient liquidity throughout the summer." The retailer attempted to work with landlords to reduce rents on its properties, which it pointed to as one of the reasons behind its current financial troubles.

The company also pointed to problems with sales performance from February to June this year, which decreased revenue by $34 million.

Prior to filing Chapter 11, the company was attempting a sale. The retailer has until October to find a buyer or it may liquidate.

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July 11

Charming Charlie

Filing date: July 11

Outcome: The accessories and apparel retailer plans to close all of its remaining stores in its second Chapter 11 filing.

A little over a year after exiting Chapter 11 on its first go around, Charming Charlie filed for bankruptcy again in July, this time with plans to wind down and close all 261 of its remaining stores.

The retailer's CFO said "onerous" leases, issues with inventory and vendors, and the continuing slowdown in brick-and-mortar retail left it unable to support its capital and cost structure.

Founded in 2004 by Charles Chanaratsopon, the retailer made its name largely by its approach to merchandising, grouping products together by color and pricing them between department stores like Macy's and teen retailers like Claire's.

Going out of business sales at the accessories and apparel retailer are expected to yield $30 million in revenue. At the time of filing, the company had 856 full-time and 2,486 part-time employees.

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March 11

Z Gallerie

Filing date: March 11

Outcome: The retailer is expected to close 17 stores and estimates that the Chapter 11 process will last four months, according to a company statement.

Z Gallerie is a home decor retailer headquartered in Los Angeles with 76 stores nationwide, operating in a space that’s sitting in the midst of disruption. Subject to court approval, the business will have $28 million debtor-in-possession financing from secured lender KeyBank National Association.

Outside of the announced 17 store closures, Z Gallerie is expected to keep physical locations and its website open and operational through the duration of bankruptcy processes, pending funding approval by the courts. Court documents state that the retailer estimates up to $500 million in assets.

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March 5

Diesel USA

Filing date: March 5

Outcome: The jeans retailer did not announce the number of stores closing at the time of filing Chapter 11, but reorganization plans include relocating stores to physical spaces that have a smaller footprint, launching a pop-up store in Miami and a rebranding initiative.

Diesel USA is a subsidiary of its parent company, Diesel S.p.A. Along with 28 stores, the business has wholesale partnerships with a variety of retailers including Nordstrom Rack, Saks Fifth Avenue and Amazon.com, among others.

The company cited a number of factors that led to its bankruptcy filing, including a decrease in wholesale orders, a dramatic decline in net sales and instances of theft and fraud. Prior to filing the retailer attempted to renegotiate leases with landlords and will not pursue the renewal of leases on a number of underperforming locations. According to the filing, "closing certain expensive, long-term, and underperforming stores as well as obtaining relief from other burdensome executory contracts is crucial to its ability to continue operating."

Diesel USA has additional plans to revamp its e-commerce platform and grow wholesale operations.

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Feb. 18

Payless ShoeSource

Filing date: Feb. 18

Outcome: The shoe retailer will shutter its roughly 2,500 store locations in the U.S. and Puerto Rico, with liquidation sales beginning Feb. 17.

The discount shoe company spent last year closing down some 900 stores and cutting jobs at its headquarters after emerging from bankruptcy late in 2017. That plan was agreed to by lenders, which at that point largely owned the company. Without a buyer in sight, though, the business now is mostly disintegrating, and its wind-down has been swift so far. The retailer operates about 3,400 stores in more than 40 countries, a footprint that Stephen Marotta, appointed last month as the company's chief restructuring officer, said in a statement contributed to its demise, and is closing a massive number of them — nearly half the store closures that Coresight Research recently estimated the U.S. would see this year.

"We expect all stores to remain open until at least the end of March and the majority will remain open until May," a spokesperson told Retail Dive in an email. "This process does not affect the Company's franchise operations or its Latin American stores, which remain open for business as usual."

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Feb. 6

Things Remembered

Filing date: Feb. 6

Outcome: Enesco, which sells gifts, home décor and accessories through third-party businesses, is buying the mall-based engraved-gifts retailer for an undisclosed amount.

As Things Remembered prepped for bankruptcy, it was also apparently working out a deal that could preserve at least some of its retail operations and jobs — the company otherwise reportedly faced the closure of most of its 400 stores. The retailer announced the sale and the filing the same day.

It was a close call for the 40-year-old retailer, which was acquired in 2012 by private equity firm Madison Dearborn from two other PE firms. Madison Dearborn exited that investment in 2017, the firm last month told Retail Dive in an email. Like many PE-backed retailers, Things Remembered, which last year attempted to boost sales through an Amazon storefront, is burdened with debt, which Reuters last month pegged at about $120 million. Leadership has also been upended more than once, as several top employees have come and gone in recent years, according to the LinkedIn pages of past executives.

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Feb. 3

FullBeauty Brands

Filing date: Feb. 3

Outcome: FullBeauty Brands filed and received approval of a prepackaged bankruptcy plan in a record-breaking 24 hours.

Plus-size apparel retailer FullBeauty announced in early January that it was expecting to file Chapter 11. In a surprise move, the company filed and received approval on a restructuring plan in 24 hours. The company agreed to turn over control to its lenders and slashed $900 million in debt, according to court documents.

In between filing and receiving approval for the restructuring plan, U.S. Trustee William Harrington filed an objection, stating that they company was rushing through the Chapter 11 too quickly. Those objections were overruled.

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Feb. 3

Charlotte Russe

Filing date: Feb. 3

Outcome: The company plans to shutter 94 stores and sell itself, and awaits court approval for $50 million in debtor-in-possession financing to keep operations afloat.

As a mall-based, teen apparel retailer owned by private equity (acquired by Advent International in 2009 in a $380 million take-private buyout), Charlotte Russe joins other embattled retailers hampered in a turnaround. Already under pressure to notch sales, the debt level creates a situation that "doesn't work," according to Greg Portell, lead partner in the global consumer and retail practice of strategy and management consulting firm A.T. Kearney.

"[T]hese aren't companies whose growth will outpace debt service," he said in comments emailed to Retail Dive, adding that it's a distraction from their basic task of retailing. "While it's true that consumer preferences are changing, successful retailers are those that can adapt to those tastes and curate goods and experiences consumers value. Retailing is not an easy exercise. Beyond the financial aspect, it requires talented merchants, skilled store labor and an inspirational vision."

Even less hobbled retailers are struggling to keep up with disruption in the sector, but those like Charlotte Russe, distracted by their financial difficulties, including their real estate, are destined to fall even further behind. "Beyond the financial aspect, it requires talented merchants, skilled store labor and an inspirational vision," Portell said. "Without those attributes, retailers will struggle. Without bold action, the retail landscape will continue to be scattered with bankruptcies."

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Jan. 16

Gymboree

Filing date: Jan. 16

Outcome: Filed with plans to liquidate all Gymboree and Crazy 8 stores and operations, while looking for a buyer for the Janie and Jack brand.

After months of rumor and speculation, Gymboree filed its second bankruptcy in as many years in mid-January. Through the Chapter 11 process, the children's retailer is shedding its unsuccessful brands, something a few analysts were surprised didn't happen during the retailer's last bankruptcy, and plans to sell the still-relevant Janie and Jack brand, as well as the IP and online platform for Gymboree. CEO Shaz Kahng noted in a statement that the retailer would be using the bankruptcy process to "preserve" the Janie and Jack brand, despite having to let go of both its namesake brand and the lower-priced Crazy 8 brand.

In its second life, Gymboree faced intense pressure from rivals like The Children's Place, as well as from big-box retailers like Target and even discount players like T.J. Maxx. The retailer also pointed to Gap as a direct competitor and noted that its secondary competitors are selling clothes "at increasingly cheaper prices." Competition impacted the amount of traffic the retailer received, which led to discounting and slimmer profits, per court documents, and the consumer shift to online didn't help either.

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Jan. 16

Shopko

Filing date: Jan. 16

Outcome: Filed for bankruptcy with plans to close stores and auction off its pharmacy operations.

Shopko is in the middle of an unfolding story about debt and assets. In December it was announced that the Midwestern retailer was closing 39 stores shortly after Debtwire revealed that the retailer was exploring restructuring. A few weeks later, pharmaceutical drug supplier McKesson Corporation filed a lawsuit alleging that Shopko owed the company $67 million after it "would not commit to any future date on which Shopko would be able to make payment," according to court documents. By mid-January the retailer filed for Chapter 11, announced additional store closures and obtained $480 million in financing from lenders to continue business operations throughout the bankruptcy process. Walgreens then won 63 stores during an auction of the retailer's pharmacy assets.

The court documents originally filed by McKesson allege that the retailer, "ceased making payments to multiple other vendors," and "has stopped paying numerous other creditors." McKesson declined further comment on those allegations.

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Jan. 11

Innovative Mattress Solutions

Filing date: Jan. 11

Outcome: Took $14 million in debtor-in-possession financing from strategic partner Tempur Sealy as it seeks a buyer.

Making and selling bedding has become a nightmare in the U.S. as disruptive material and sales innovations from bed-in-box startups like Casper continue to undermine traditional store-based mattress sales in the U.S. Innovative Mattress Solutions, which runs the Sleep Outfitters, Mattress Warehouse and Mattress King brands, is hardly alone: Ubiquitous retailer Mattress Firm is in the process of shuttering some 700 stores after filing Chapter 11 last fall.

IMS has significantly fewer stores — all told its banners operate 142 specialty sleep retail locations, primarily in the southeastern U.S. — and last year contributed less than 2% of the Tempur Sealy's global net sales. Still, Tempur Sealy CEO Scott Thompson earlier this month called the businesses retail footprint "overextended" and its capital structure "thin," with neither "designed to effectively respond to the competitive pressures of the recent retail environment."

While legacy businesses in the market count sheep, the disruptors are busy counting sales. Leader Casper started off last year with plans to open its first standalone store and has expanded that to plans for 200 across North America after inking deals with Target and Nordstrom. Rivals Tuft & Needle, Leesa, Nest and Purple have partnered with legacy retailers and Amazon, which itself moved into the space last year with its own affordable and premium mattress options.

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Jan. 6

Beauty Brands

Filing date: Jan. 6

Outcome: Filed with plans to liquidate 25 stores and potentially sell its remaining 33.

The first weekend after the new year began, Beauty Brands filed for Chapter 11 bankruptcy protection, saying it had entered into an asset purchase agreement with Hilco Merchant Resources for the sale of its operating assets. At the time of the filing, the retailer owed $6.9 million on a secured loan and $11 million in unsecured debt to suppliers and landlords.

Just before filing, the retailer had announced the closure of 25 stores, which it plans to liquidate through Chapter 11. The retailer plans to sell the remaining 33, though CEO Caryn Lerner noted at the time that all stores remained open and that the company's objective was to "emerge from Chapter 11 in a stronger position and move forward as a successful brand."

Among other things, the company pointed to an unsuccessful brand repositioning attempt, which caused it to open 11 new format store locations between 2014 and 2016 and led to significant operating losses as those stores underperformed. The story comes at a time when many beauty retailers are performing well, and startups like Glossier and Birchbox are making ever more ambitious moves into the space.

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