It has been a dark period for well-loved retailers. Sometimes chains close and it's easy to see why.
Their day has passed, or they never really connected with a customer base. Maybe they met a need, but they didn't really build a loyal audience and that's a recipe for being cast aside when consumers found another place to shop.
Related: Popular restaurant chain shares bad Chapter 11 bankruptcy news
That's arguably not the case for Christmas Tree Shops and Tuesday Morning, two treasure hunt model retailers that ended up moving from Chapter 11 bankruptcy into a Chapter 7 liquidation. Joann, another retail chain with a cult-like following, has managed to survive its Chapter 11 filing and emerge with much less debt, but having to ask for court protection is always a risky choice.
Some retailers let it be known that bankruptcy might be on the table. In many cases, that gets signaled when the company hires a retail turnaround firm or brings in a CEO with experience helping companies through the bankruptcy process.
In other cases, retailers say nothing, but ominous signs begin to appear. Stores closing and workers getting laid off can be warning signs. So can shelves that aren't quite as full as usual.
There's no guarantee that these signs mean a bankruptcy filing is evident, but they are clearly a warning that the company might be having cash-flow issues. It's possible that taking harsh steps early can keep a company solvent, but many times that's not what happens.
Image source: TheStreet
Two famous New England chains closing locations
Bob's, a discount clothing chain, and Eastern Mountain Sports, now known as EMS, a sporting goods retailer focused on outdoor sports, have been New England institutions for decades.
The two chains, which now have the same owner, each operate 12 locations in Connecticut along with locations in Maine, Massachusetts, New Hampshire, New Jersey, New York, and Vermont. Those stores are supported by a 240,000-square-foot headquarters and distribution center in Meriden, Conn., and the company has suddenly laid off about 150 workers at that location, CTInsider reported.
“We would like to have given you more notice of this action but were unable to do so because the bank has informed us within the last week that it will refuse to fund the employee health insurance premiums, 401k administration, payroll, as well as other critical financial obligations which, if not paid, will likely prevent us from being able to operate the business going forward,” Bob's and EMS President David Barton wrote in a May 21 letter to the state Department of Labor and Meriden Mayor Kevin Scarpati. “As of this date, they remain firm on their position despite our continuing best efforts to convince them otherwise.”
That news was followed by Bob's and EMS' sharing closure notices for roughly 10 locations.
Update 6-20: The corporate parent for Bob's Stores and Eastern Mountain Sports has filed for Chapter 11 bankruptcy protection in a federal court in Delaware. The company has 369 creditors, according to the filing, as well as assets of between $50 million and $100 million and an equal amount of liabilities, reported the Middletown Press.
Bob's and EMS' websites are down
Both the Bob's and EMS websites are currently not working although they offer slightly different reasons for that.
Bobstores.com blames the outage on maintenance.
"Under construction. Pardon our mess while we make some planned updates to our website. We'll be back soon with an enhanced online shopping experience! In the meantime, our stores are open and stocked. Come in for the best deals on the brands you love," the company shared on its web page,
EMS has a similar message but makes it slightly more playful
"Gone hiking. Except our IT department who are hard at work making planned updates to our website. Take a break, get outside, or stop by your local EMS store in the meantime. We'll see you back on our new, enhanced website soon," EMS shared.
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There is no way to contact either brand on its website. CTInsider was sent a statement on the store closures.
“Bob’s Stores and Eastern Mountain Sports are in the midst of making aggressive changes to ensure the future health of our company,” the statement said. “As part of these changes, we have made the difficult decision to close 10 under-performing stores. We are actively working to relocate as many employees as possible from these impacted locations to nearby Bob’s and Eastern Mountain Sports stores.”
Both Bob's and EMS have survived multiple bankruptcies by various previous parent companies.
