When a business’s name becomes nearly synonymous with its industry, it seems inconceivable that it could ever fail. For even some of the largest retailers, however, filing for bankruptcy is their best choice. These are ten of the largest retail bankruptcies in the past decade:
Blockbuster: 2010 — Assets of $1.54 billion
The popular video rental store struggled with sales when Netflix and other video-on-demand services emerged. It filed for bankruptcy in 2010 and was bought by Dish Network in 2011. Sadly, two years later, the video-rental giant closed the rest of its stores for good.
Borders: 2011 — Assets of $1.42 billion
Borders was a go-to store for books, music, and DVDs. Unfortunately, the store was slow to adapt to the e-books phenomenon (unlike Barnes & Noble, which is still in business). Additionally, Borders’s website couldn’t compete with a user-friendly e-commerce site like Amazon, which took over most of Borders’s sales. This led to the bookstore’s ultimate demise in 2011 when it closed the remainder of their stores.
Brookstone: 2014 — Assets of $407 million
This specialty retailer was famous for its massage chairs and travel electronics; however, because of high debt, it filed for bankruptcy protection in 2014. There is a silver lining for this store. Unlike many of its bankrupt retail peers, Brookstone survived bankruptcy and is still in operation with more than 200 stores open.
Circuit City: 2008 — Assets of $3.75 billion
Once the top electronics retailer in the United States, Circuit City was unable to respond as quickly to the rise of online retailers like Amazon or compete with giants such as Target and Walmart. The plummet in sales caused it to file for bankruptcy in 2008. It failed to find a buyer to keep the store operating, so it ultimately went out of business in 2009.
Friedman’s: 2008 — Assets of $448 million
When the recession hit in 2008, many businesses were affected, including mid-tier jewelers like Friedman’s. Because consumers cut back on unnecessary spending, Friedman’s was hit by an involuntary Chapter 7 liquidation filing, which was later converted to a Chapter 11 proceeding. Ultimately, however, the store went out of business, closing all 455 of its stores.
General Atlantic & Pacific Tea (A&P) — 2015. Assets of $1.6 billion
Last year, the A&P, a supermarket chain, filed for Chapter 11 protection for the second time in five years, selling many of its remaining stores to Acme and Stop & Shop. This came after the store was unable to draw in both lower-end consumers who went to Target, Walmart, and Costco, and higher-end consumers, who purchased their goods from Whole Goods. This case is in bankruptcy, and it is unclear what the ultimate resolution will be.
Linens & Things: 2008 — Assets of $1.74 billion
At one point, this 570-store housewares chain boasted annual sales of $2.7 billion. Unfortunately, the business became insolvent after Apollo Global Management, a private equity firm, incurred more debt than it could handle. Two years ago, Linens & Things was sold to Galaxy Brand Holdings, part of The Carlyle Group, a private equity firm.
Radio Shack: 2015 — Assets of $1.59 billion
Radio Shack has the distinction of selling the very first mass-market computer, but the 94-year-old retailer filed for bankruptcy in 2015, after a long struggle competing against online and digital technology firms. Recently in March, a federal judge approved Radio Shack’s Chapter 11 plan, which provided for the sale of the business and the proceeds of the sale going to the company’s creditors. The shareholders received only a negligible amount.
Sbarro: 2011 and 2014 — Assets of $490 million
Once gracing the food courts of countless malls in America, Sbarro filed for bankruptcy protection in 2011 and again in 2014. In June 2014, it emerged from bankruptcy with a smaller debt load.
Sports Authority: 201 — Assets of $1 billion
The most recent big store to file for bankruptcy is Sports Authority. Although it’s closed around 140 of its 463 stores, Sports Authority hopes that a leaner balance sheet will help to make its remaining stores profitable.
Whether you’re an individual, a family, or a business, filing for bankruptcy is not an easy decision to make. Let Bankruptcy Advocates by your guide! We have more than 40 years of combined experience in representing families, individuals, and businesses in bankruptcy. Call us today for a free consultation at (618) 549-9800 to get started on the path to financial freedom.
Southern Illinois Bankruptcy Attorney law firm Bankruptcy Advocates is located in Carbondale and serves a wide geographic community. The first consultation is always free. Give us a call at 618-549-9800 or email us at [email protected] to speak about your case or legal matter. Convenient appointment times are available.