Retail bankruptcies have jumped through the first nine months of 2023 with over 4,500 U.S. businesses filing for Chapter 11. That's a 61% increase over the same period last year and some big names including Bed Bath & Beyond, Christmas Tree Shops, and Tuesday Morning have all been liquidated this year.
Two other big names, David's Bridal and Party City managed to survive Chapter 11 and return to mostly normal operations. You can blame the covid pandemic on creating a hole for many retailers that proved impossible to dig out of, but that's not the only factor driving retailers out of business.
Related: Popular retailer files Chapter 11, ending all operations
Supply chain issues have driven prices higher and labor shortages have led to increased wages. In addition, consumers remain wary about the economy which has led to some pullback when it comes to bigger ticket and discretionary purchases.
Add in that rising interest rates have made loans more expensive and harder to come by and you have a sort of perfect storm that has driven more companies out of business. Another major player has fallen as Judge Laurie Selber Silverstein of the U.S. Bankruptcy Court of Delaware has ordered one popular retail chain from Chapter 11 Bankruptcy into Chapter 7 liquidation.
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The end comes for Mitchell Gold + Bob Williams
Upscale furniture maker Mitchell Gold + Bob Williams first shared that it was having financial trouble in late August. The company unexpectedly closed its 27 stores across 14 states and multiple Canadian provinces over the weekend of Aug. 26-27.
The retailer shut down when it was “unable to secure critical financing to continue business operations,” according to a Worker Adjustment and Retraining Notification Act (or WARN) notice filed in North Carolina.
That letter was followed by a Chapter 11 filing and the company, which was purchased by Stephens Group in 2014, immediately laid off 500 workers at its North Carolina campus.
Mitchell Gold + Bob Williams did not respond to a request for comment from TheStreet made through a form on its website.
At the time of the Chapter 11 filing, the brand, which also operated 40 virtual stores and six outlet locations along with its 27 retail stores, had hoped to find funding to continue.
That has not happened and Judge Silverstein has removed that option from the table.
Mitchell Gold + Bob Williams forced to liquidate
Silverstein stepped in after it became clear that the company was not going to be able to reach a deal. She declared that Chapter 7 was in the best interest of the debtors, their estates, creditors and all other interested parties, Furniture Today reported.
"Court documents tell a story of back-and-forth between the company and its lead secured creditor PNC Bank. Attorneys for Mitchell Gold + Bob Williams were arguing for a reorganization under the bankruptcy laws that would allow some customers to receive orders, while the bank wanted a quick sale of the company’s assets," according to the industry website.
No details have been shared about how the company's assets will be disposed of. It remains possible that a third party could step in and buy the company's name and/or its manufacturing facilities.
In the Mitchell Gold + Bob Williams Chapter 11 filing, the company said that multiple parties had expressed interest in its assets, some as a group, and others individually.
The furniture company closed its doors after PNC Bank accelerated its obligations and refused to provide the funds to pay Mitchell Gold + Bob Williams workers.
