A list of major retail bankruptcies from 2015 to today.
Modern-day retail is at an inflection point as retailers face struggling physical storefronts, massive debt, and inefficient operations, among other issues.
Kicking off the week, Claire’s has filed for Chapter 11 bankruptcy protection. The teen retailer is expected to keep its 1,600 US locations open as it negotiates with lenders to reduce its debt.
Last week, Toys R’ Us announced that it would close 800 stores and lay off over 30,000 workers after failing to emerge from bankruptcy.
The frequency of high-profile retail bankruptcies in the US has sped up recently, as the timeline below shows.
In 2017 alone, we saw 21 bankruptcies.
In this report, we dig into 40 recent bankruptcies starting in 2015 and the reasons behind them. As we’ll see, Amazon is not the only reason that physical retail is troubled, mounting debt and retailers’ own missteps and lack of adaptability are also to blame, among other factors.
Later, we dig further into the common themes among the bankruptcies.
A timeline of retail bankruptcies
Retail bankruptcies in 2018
Claire’s
Date: March 2018
Category/Product(s): Teen accessories
Summary: The teen accessories retailer, well-known for its ear-piercing service, filed for bankruptcy protection in March 2018. Claire’s has been unable to make good on its debt obligations after a private equity firm took the company private as part of a $3.1B leveraged buyout in 2007. This represents the latest retailer to be brought down by a combination of private equity debt, and e-commerce competition. Claire’s is currently negotiating with its lenders to reduce its debt as it continues to operate its retail locations.
The walking company
Date: March 2018
Category/Product(s): Footwear
Summary: The California-based comfort footwear retailer filed for bankruptcy in March 2018, its second in the past ten years. While the company successfully emerged from its first bankruptcy, it was unable to stay afloat after one of its major suppliers cut ties. In addition, the company has had difficulties keeping up with rent. Current plans to turn the company around, which include investments from shareholders and a bankruptcy loan, will be dependent upon the company’s ability to renegotiate leases with its current landlords.
Bon-ton
Date: February 2018
Category/Product(s): Department store chain
Summary: Milwaukee-based Bon-Ton filed for Chapter 11 bankruptcy protection in February 2018 due to ongoing struggles with declining sales as well as difficulties in adapting to e-commerce. The debt-ridden company also had to compete with a similar product assortment as more well-known rivals such as J.C. Penney and Macy’s, who are also struggling. Bon-Ton is currently working to close 40+ physical stores and is also exploring the possibility of a sale.
KIKO USA
Date: January 2018
Category/Product(s): Beauty
Summary: The American subsidiary of an Italian makeup retailer filed for Chapter 11 bankruptcy in January 2018. The company has made plans to restructure which includes the closure of nearly all of its remaining domestic stores. According to the company’s chief executive, Kiko USA suffered from extremely high operating costs and continually depressed profits in recent years. While Kiko had witnessed its online sales grow in 2017, it was not enough to protect its brick-and-mortar stores from the rise of e-commerce and overall decline in shopping mall foot traffic.
A’gaci
Date: January 2018
Category/Product(s): Apparel & accessories
Summary: 2018’s first retail apocalypse victim, Texas-based fashion retailer A’gaci, filed for Chapter 11 bankruptcy protection in January 2018 due to poor financial performance, which stemmed from a badly planned physical retail expansion, hurricane damages, and other internal issues. Post-bankruptcy, the company seeks to decrease its physical footprint and focus on its more profitable storefronts.
Retail bankruptcies in 2017
CHARMING CHARLIE
Date: December 2017
Category/Product(s): Apparel & accessories
Summary: Apparel chain Charming Charlie was the final casualty in 2017’s retail apocalypse. Founded in 2004, the company has historically provided mid-price range, color-coordinated apparel and accessories assortments. The company filed for Chapter 11 protection on December 11, citing declining sales due to issues with inventory, merchandising, and vendors. Charming Charlie plans to close 100 of its stores by the end of 2017 with larger plans to restructure its debt and business.
Styles For Less
Date: November 2017
Category/Product(s): Teen apparel
Summary: Teen apparel chain Styles For Less filed for Chapter 11 bankruptcy protection in November 2017. The company cited issues such as industry discounting, e-commerce, and competition from fast fashion brands (which bring inexpensive designs to stores to quickly meet emerging fashion trends). As of early November, Styles stated it had closed 50+ of its stores, laid off 300+ employees, and cut salaries to shed debt in anticipation of a turnaround bid.
Toys “R” Us
Date: September 2017
Category/Product(s): Children’s toys
Summary: Toys “R” Us was the third largest bankruptcy in the US (after KMart in 2002 and Federated Department Stores, now Macy’s, in 1990). A mounting debt, due to a leveraged buyout by a few private equity firms in 2005, along with competition from Amazon and other online merchants, caused Toys “R” Us’ ongoing crisis, which culminated in a Chapter 11 filing in September 2017. Despite hopes of a turnaround amidst its Chapter 11 filing, in March 2018, the company ultimately decided to close all of its stores, after a disappointing holiday sales period.
Aerosoles
Date: September 2017
Category/Product(s): Footwear
Summary: Affordable footwear retailer Aerosoles struggled to compete in an tough apparel market as it looked to balance affordability and comfort with changing fashion trends, while competing with even cheaper fast fashion chains. The company filed for Chapter 11 bankruptcy in September 2017, noting the need to improve its financials and close many of its 88 stores. Aeropostale had been owned by private equity firm Palladin Consumer Retail Partners since 2014.
Vitamin World
Date: September 2017
Category/Product(s): Vitamins
Summary: With 334 retail locations and over $43M in debt, Vitamin World declared bankruptcy. The company cited supply chain and ingredient availability issues as contributing factors towards its decline. In late November 2017, Vitamin World won court approval to close over 100 stores and put the rest up for sale over the 2017 holiday season.
Perfumania
Date: August 2017
Category/Product(s): Perfume & beauty
Summary: Amidst declining sales and piling debt, Perfumania filed for Chapter 11 protection in August. Increased expenses, supply chain inefficiencies, and the need to enhance operating results contributed to the perfume retailer’s bankruptcy, which was court-approved in October. Perfumania plans to go private and become a digital retailer with a renewed focus on e-commerce and omnichannel initiatives. The company will have to compete with direct-to-consumer perfume brands like Scentbird, Sniph, and others.
Alfred Angelo
Date: July 2017
Category/Product(s): Bridal dresses
Summary: In July 2017, Florida–based Alfred Angelo filed for Chapter 7 bankruptcy, which allowed the company to liquidate instead of restructure its debt. This caused a frenzy for bridal parties who had pre-ordered dresses. Competitors, such as David’s Bridal, even offered discounts for brides who had previously ordered dresses from the bankrupt retailer. The company faced an eviction lawsuit over unpaid rent at the end of June, prior to declaring bankruptcy.
True Religion Apparel Inc.
Date: July 2017
Category/Product(s): Denim & jeans
Summary: California-based denim retailer True Religion was another company who sought bankruptcy in efforts to revive itself from huge debts and decreasing sales. The company struggled to retain business in a difficult denim market that was being chipped away by the athleisure clothing trend as well as fast fashion and low-priced retailers. After filing for Chapter 11 protection in July, the company exited in October with plans to establish a smaller footprint and increase digital growth.
Papaya Clothing
Date: June 2017
Category/Product(s): Teen apparel
Summary: Papaya Clothing joined many of its mall-based peers earlier in June after facing financial difficulties from e-commerce and fast fashion competition, along with a badly timed expansion plan. The company has asked the court to exit 30 stores but plans to stay open as it looks to restructure debt, rationalize its retail footprint, and fulfill other financial obligations.
Gymboree
Date: June 2017
Category/Product(s): Children’s apparel
Summary: Another victim to financial woes and a leveraged buyout (by Bain Capital in 2010), Gymboree filed for Chapter 11 protection in June 2017. The company, renamed to Gymboree Group Inc., exited bankruptcy in October 2017 with plans to close and liquidate 330 under-performing stores and shed $900M in debt. Moving forward, the company plans to revamp its brand, decrease its store footprint, and increase omnichannel initiatives.
Rue21
Date: May 2017
Category/Product(s): Teen apparel
Summary: Amidst closing over 400 stores in efforts to downsize, teen specialty apparel retailer Rue21 filed for Chapter 11 bankruptcy in May 2017 and agreed to reduce debt and reorganize internally thanks to an injection of new capital from investors. The company cited the general retail industry downturn, declining sales, and increasing operating costs along with internal problems such as merchandising, strategy, and e-commerce fulfillment as major factors that led to bankruptcy. However, the company emerged from this carefully planned bankruptcy in less than four months from the initial filing with intentions to maintain high performing stores and to continue growing its e-commerce business.
Payless
Date: April 2017
Category/Product(s): Footwear
Summary: After a leveraged buyout in 2012 by private equity firms Blum Capital and Golden Gate, Payless continued struggling with a large debt and weak sales amidst a challenging retail environment. The discount footwear chain filed for Chapter 11 protection in April 2017, which resulted in an agreement with lenders to close 800 stores and reduce debt. The company recently announced a new strategy that will shift its focus to Hispanic markets, establish a new pricing strategy, and streamline corporate headquarters.
Gordmans
Date: March 2017
Category/Product(s): Discount department store
Summary: Nebraska-based Gordman’s struggled to adapt to e-commerce (it launched an online site in 2015) and experienced declining sales since 2012. Exacerbated by a legacy Wall Street development from 2010 that accelerated the company’s cash depletion, Gordman’s filed for bankruptcy in March 2017 and announced severe job cuts. The company’s final liquidation plan was approved in November.
Gander Mountain
Date: March 2017
Category/Product(s): Outdoor recreation
Summary: Another outdoor retailer, Minnesota-based Gander Mountain filed for Chapter 11 bankruptcy in March 2017 and announced plans to close 30+ under-performing stores. Outdoor and camping retailer Camping World won the bankruptcy auction for Gander Mountain for approximately $37M. The company recently rebranded as “Gander Outdoors” and has noted plans to relaunch in 2018 with a revamped customer experience for outdoors enthusiasts.
RadioShack
Date: March 2017 (second bankruptcy)
Category/Product(s): Electronics
Summary: After a disappointing co-branded partnership with Sprint, which was launched to help RadioShack better compete and Sprint to scale its own business, the company declared bankruptcy for the second time in March 2017 (after previously doing so in 2015). RadioShack exited bankruptcy earlier in November 2017 with hopes of operating as an online retailer with a limited physical footprint.
HHGregg
Date: March 2017
Category/Product(s): Consumer electronics & home appliances
Summary: Beyond apparel, big-box electronics stores have also faced fierce competition in recent years. Unable to compete with Best Buy and Amazon, Indiana-based HHGregg filed for bankruptcy. Holding company Valor LLC, which outbid Sears and Best Buy, bought the company’s rights and HHGregg emerged from bankruptcy in October 2017 as a purely online brand. Though the company’s website has a section for store information, HHGregg currently has no physical footprint. However, new leadership has recently claimed that HHGregg will make a comeback with a revamped website and smaller physical footprint.
Vanity
Date: March 2017
Category/Product(s): Women’s apparel
Summary: Mall-based specialty apparel retailer Vanity was one casualty of the retail apocalypse that did not have a future post-bankruptcy. After filing for Chapter 11 protectiion in March 2017, the company decided to close all of its 140 stores across the US, effectively eliminating jobs for approximately 1,400 employees. After filing, Vanity’s website (which no longer exists) advertised a going-out-of-business sale.
BCBG
Date: February 2017
Category/Product(s): Women’s apparel
Summary: Another mall-based women’s clothing store known for special occasion dresses, BCBG had a distinct and widely loved brand but still failed to differentiate its apparel from other department and specialty stores. Exacerbated by operational challenges and competition from e-commerce and fast fashion brands, the company declared bankruptcy in February 2017. Marquee Brands and Global Brands Group Holding Ltd. acquired BCBG’s IP and assets. The company has emerged from bankruptcy in August with plans to move forward by decreasing its brick-and-mortar footprint and foraying into new categories, all while still keeping a mid-price range.
Eastern Outfitters
Date: February 2017
Category/Product(s): Outdoor apparel and gear
Summary: Eastern Outfitters, which was formed out of Vestis Retail’s bankrupty was perhaps not surprising after leading sporting goods brand Sports Authority’s bankruptcy in 2016. Increased competition, high retail costs, and consumer shifts to experiential spending had created a tough climate for the sporting goods and apparel industry. Ultimately, British retailer Sports Direct acquired certain assets (including Bob’s Stores and Eastern Mountain Sports) of Eastern Outfitters for $101M in cash.
Wet Seal
Date: February 2017 (second bankruptcy)
Category/Product(s): Teen apparel
Summary: Wet Seal struggled to differentiate its apparel from struggling rivals such as Abercrombie & Fitch and Aeropostale, and struggled to succeed even after its first bankruptcy (2015). After its buy out by Versa, the company had trouble meeting the private equity firm’s demands and filed yet again for bankruptcy protection in February 2017. After closing over 330 stores, Wet Seal was then bought by investment and advisory firm Gordon Brothers for $3M in March 2017.
The Limited
Date: January 2017
Category/Product(s): Women’s apparel
Summary: Mall-based women’s apparel brand The Limited was 2017’s first retail apocalypse victim thanks to declining mall traffic, lower-than-anticipated sales, and competition from fast fashion brands like H&M and Zara. After declaring Chapter 11 bankruptcy in January 2017, private equity firm Sycamore Partners, which specializes in retail investments, bought The Limited’s IP and e-commerce assets. The company subsequently closed its 250 retail stores across the US. With a renewed focus on plus size fashion, The Limited recently launched a new website with plans to bring back The Limited storefronts to malls.
Retail bankruptcies in 2016
american apparel
Date: November 2016 (second bankruptcy)
Category/Product(s): Apparel
Summary: Within a year of its first bankruptcy, American Apparel declared bankruptcy for the second time in November 2016. This time, Canadian apparel company Gildan acquired the company and replaced its “made in America” manufacturing (which was highly expensive) with the motto “Globally Sourced, Ethically Made, Still Sweatshop Free. That’s American Apparel.”
aeropostale
Date: May 2016
Category/Product(s): Teen apparel
Summary: Teen retailer Aeropostale faced similar challenges to other mall-based retailers and declared bankruptcy in May 2016. The company exited bankruptcy after shedding a large chunk of its physical retail presence and kept 230 stores open after a buy out by mall operators Simon Property Group and General Growth. Since then, the company has reopened over two-thirds of its closed stores under new leadership and is focused on refreshing its brand.
vestis retail group
Date: April 2016
Category/Product(s): Sporting goods
Summary: Owner of Eastern Mountain Sports, Bob’s Stores, and Sport Chalet, Vestis Retail Group (owned by private equity firm Versa Capital Management LLC) announced plans for Chapter 11 bankruptcy in April 2016. Due to operational and financial challenges, the company decided to shut down its Sport Chalet business and place a long-term strategic focus on Bob’s Stores and Eastern Mountain Sports. Sport Chalet began closing all of its locations that month, while EMS and Bob’s closed only 9 locations in total.
pacsun
Date: April 2016
Category/Product(s): Teen apparel
Summary: Surf and skate apparel brand PacSun faced evolving teen apparel trends and long-term debt issues and ultimately declared bankruptcy in April 2016. San Francisco-based private equity firm Golden Gate Capital acquired PacSun, which exited from bankruptcy just 5 months later, having decreased its store count as well as a great deal of its debt in a debt-for-equity swap.
sports authority
Date: March 2016
Category/Product(s): Sportswear
Summary: Sporting goods retailer Sports Authority declared bankruptcy in March 2016 with intentions of finding a buyer and closing 140 of 450 stores. Beyond competition from other big-box retailers and Amazon, major sports leagues such as the NBA and NFL that sell team merchandise also chipped away at Sports Authority’s market share. After failing to find a buyer to keep the business alive, the company liquidated and sold all its assets in May 2016, signalling continued difficulties for brick-and mortar sportswear apparel.
hancock fabrics
Date: February 2016 (second bankruptcy)
Category/Product(s): Fabrics
Summary: Mississippi-based Fabric retailer Hancock Fabrics first declared bankruptcy in 2007, but it emerged over a year later. However, a difficult retail environment amidst competition from Jo-Ann Fabric and Crafts forced the company to declare a second bankruptcy in February 2016. Unable to find a buyer, Hancock sold its branding rights and IP to arts and crafts retailer Michaels, allowing the company to leverage Hancock’s customer data to get into the sewing business. Hancock Fabrics ultimately went out of business completely and closed all 185 of its stores nationwide in 2016, signalling the end of over-niched big-box retailers.
Retail bankruptcies in 2015
Good Times Convenience Stores
Date: November 2015
Category/Product(s): Gas & Convenience
Summary: Facing legacy supply issues from 2006, Good Times Convenience Stores, once a major player for gas stops and convenience stores, declared Chapter 11 protection in November 2015. Back in 2006, Dallas-based Alon USA Energy Inc. purchased 40 of its stores and converted them into 7-Elevens.
american apparel
Date: October 2015
Category/Product(s): Apparel
Summary: Manufactured-in-America brand American Apparel faced declining sales, massive debt, and internal issues with controversial founder Dov Charney, ultimately leading to its first Chapter 11 bankruptcy in October 2015. The company emerged from bankruptcy in February 2016 under the ownership of hedge fund Monarch Alternative Capital LP.
city sports
Date: October 2015
Category/Product(s): Sports apparel
Summary: Boston-based sports apparel retailer City Sports filed for bankruptcy in October 2015, after facing competition from athletic apparel retailers. The company liquidated its assets, closed over two dozen of its stores nationwide, and was bought by the Sonnek-Schmelz brothers, who also owned soccer store chain Soccer Post. In April 2017, the company’s website relaunched to sell online merchandise and it announced the upcoming opening of new storefronts in Boston, New York, Philadelphia, and Washington, D.C.
Quiksilver
Date: September 2015
Category/Product(s): Surfwear apparel
Summary: Orange County-based surfwear company, Quiksilver, which was the first surfwear company to go public in 1986, succumbed to the rise of fast fashion. Exacerbated by a declining popularity in surfwear apparel during the recession, the company opened too many stores that relied too heavily on its surfwear products. Quiksilver ultimately declared bankruptcy in September 2015. The company restructured approximately $800M in debt and became private under the new management of private equity owner Oaktree Capital. In March 2017, the company rebranded to become Boardriders, Inc. and in early December, made a bid to acquire Australian competitor Billabong, which is currently pending approval.
GM pollack
Date: July 2015
Category/Product(s): Jewelry
Summary: Employee-owned jewelry chain GM Pollack, which was family-owned until 2009, began shutting down stores in June but did not originally plan to close all of its stores. However, the company ultimately announced Chapter 7 bankruptcy in July 2015 and that it would be dissolving its entire business due to massive debt. This created issues for customers who had previously purchased products as they no longer had a parent company through which to claim warranties.
Great Atlantic & Pacific Tea (A&P)
Date: July 2015
Category/Product(s): Grocery
Summary: In a second bankruptcy within 5 years, or “Chapter 22,” the Great Atlantic & Pacific Tea Co. Inc. (which owned the A&P supermarket chain) chose to sell 125 stores and close 25 in efforts to save jobs and pay creditors. The parent company faced financial difficulties, internal strategy issues, and industry shifts that ultimately led to bankruptcy.
radioshack
Date: March 2015
Category/Product(s): Electronics
Summary: RadioShack’s first bankruptcy in March 2015 was an early indication that the company wasn’t prepared for the rise of mobile phones or competition from the likes of Best Buy and Amazon. Following this initial bankruptcy, RadioShack emerged as a private company after being bought by General Wireless, an affiliate of hedge fund Standard General LP.
Wet Seal
Date: January 2015
Category/Product(s): Women’s apparel
Summary: After announcing the closure of two-thirds of its retail locations, Wet Seal declared bankruptcy in January 2015. The brand was not able to innovate fast enough as it faced competitive pressure from fast fashion brands like H&M and Zara. Wet Seal was subsequently bought by private equity firm Versa and its struggles ushered in a wave of bankruptcies for other mall-based teen apparel chains.
Themes in the retailapocalypse
These retail bankruptcies fall into a few themes:
- Decline of physical retail – With the shift to e-commerce, fewer and fewer customers are shopping at big-box physical retailers and malls. Additionally, many of these physical retailers have lost the cache they once had as new direct-to-consumer brands with a hyper-focus on specific products have taken off.
- Digital laggards – Many big-box retailers either failed or were too late to establish an online presence. With the rise of Amazon and digitally native direct-to-consumer brands, retailers that don’t adapt quickly enough inevitably fail to compete.
- Mounting debt – Crippling debt, fueled by post-financial crisis leveraged buyouts by private equity firms, has forced many retailers to declare bankruptcy.
It’s important to note that bankruptcy doesn’t always result in the death of a company; many retailers have used bankruptcies to restructure internally with positive outcomes. However, some of the companies to go bankrupt this year are on their second bankruptcy.
Bankruptcies are propelling a growing narrative around the death of physical retail. Including stores of bankrupt retailers, over 7,000 stores closed in 2017 in the US. Apparel and electronics stores account for nearly half of this year’s store closures, according to JLL research.
Using the CB Insights Trends tool, we can see the spike in media discussion of an impending “retail apocalypse.”
Is this fear warranted?
Yes, physical retail is dramatically transforming. But that doesn’t mean it’s dead.
With new physical retail models emerging such as pop-up shops, automated convenience stores, and more, retailers that successfully emerge post-bankruptcy have opportunities to focus their retail footprints as well as reduce debt, leverage omnichannel activity, and streamline internal operations.