High interest rates, changing consumer demand, and the debt hangover from the Covid pandemic have created a bleak situation for many retailers. Bigger chains like Macy's, which has closed hundreds of locations, have the ability to make the financial moves needed to pivot their businesses.
Smaller retailers, even once-successful regional chains have not been as lucky. You can't change your business model without cash, and capital markets have gotten tight.
Related: Another popular beer brand files Chapter 11 bankruptcy
Those reasons (among others) have claimed companies including Olympia Sports and Modell's — two storied brands with deep roots in the communities they serve. In addition, Sam Ash, a beloved music chain that invited musicians to test its wares filed for Chapter 11 bankruptcy and is in the process of closing all of its stores.
Sam Ash will at least live on as a website under new owners. Another bankrupt retailer, Bed Bath and Beyond, had its name revived by the former Overstock.com, but many of these once-popular brands have fallen victim to a set of circumstances that may be beyond their control.
Now, shortly after a June 18 Chapter 11 bankruptcy filing, another popular regional chain with a long history will be closing its doors, presumably for good.
Image source: Hanna Lassen/Getty Images
Bob's Stores faced a bleak future
Bob's Stores, which shares a corporate parent with Eastern Mountain Sports (EMS) filed for Chapter 11 bankruptcy on June 18 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.
At the time, the company did not share much publicly but did file a notice with the state of Connecticut, where it has its headquarters. The company reported that it could not meet its obligations to employees.
“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.
Despite that letter, there was some hope that at least some of the stores could be saved or a buyer would emerge for the retail brands that served New England, New York, and New Jersey.
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Bob's Stores will close as part of bankruptcy process
Any hopes of a Bob's revival or a last-minute save were dashed when the company shared a press release on July 2 saying the brand would be shut down.
"Bob's Stores will close all of its Bob's locations and liquidate all inventory, as part of the Chapter 11 restructuring petition filed on June 18, 2024. Despite making swift and aggressive changes to the company's structure and operations, Bob's Stores was unable to secure the finances needed to maintain operations," the company shared.
No mention was made of EMS and RetailDive attempted to contact the company (which no longer has contact info on its website) but the request was not answered.
"Bob's stores began Going Out of Business sales in stores on Friday, June 28, with discounts of 30-70% off," according to the media release.
Dave Barton, Bob's president, shared his remorse over not being able to find a path forward.
More bankruptcy:
- Distressed discount furniture chain plans Chapter 11 bankruptcy
- Another popular cafe files unexpected Chapter 11 bankruptcy
- Struggling clothing brand files Chapter 11 bankruptcy
"We regret that our financial position necessitated the liquidation of Bob's Stores. Bob's has been a stalwart of our local communities for nearly 70 years, and we know our customers remember us as having been there for major moments in their lives," he shared.
Hilco Merchant Resources in a joint venture with Gordon Brothers will manage the liquidation sales, which will include all Bob's stores throughout Connecticut, Massachusetts, New Hampshire, New Jersey, New York, and Rhode Island. In addition to the chain's normal inventory being sold off, select store fixtures, furniture, and equipment will also be sold.
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