Brookstone files for bankruptcy protection and plans to shutter all 101 mall stores
- Brookstone files for Chapter 11 bankruptcy protection and says it is shuttering all of its 101 stores in malls across the United States.
- The retailer hopes to find a buyer to salvage its airport locations, e-commerce business and wholesale operations.
Brookstone filed for Chapter 11 bankruptcy protection on Thursday and said it is shuttering all of its 101 stores in malls across the United States.
It blamed a "continued deterioration of traditional mall traffic."
The company said it will continue to operate its 35 airport stores and e-commerce and wholesale businesses, and hopes to sell them.
Several mall-based retailers have filed for bankruptcy protection during the past few months, many of them apparel brands, including The Limited, Wet Seal, Rue21 and department store chain Bon-Ton. A shift toward online spending among consumers has threatened many businesses that rely primarily on their brick-and-mortar locations to drive sales.
Shopping malls in particular already have a glut of vacant stores to fill and are looking to online start-ups and international businesses to do so. CNBC reported earlier this year that U.S. malls haven't been this empty since 2012, but landlords are still hopeful they'll be able to find new uses for the space, many outside of retail.
"The decision to close our mall stores was difficult, but ultimately provides an opportunity to maintain our well-respected brand and award-winning products while operating with a smaller physical footprint," Brookstone CEO Piau Phang Foo said in a statement.
This is the second time the retailer finds itself in this situation. In 2014, Brookstone filed for bankruptcy protection and was later sold to a Chinese business that kept most of its more than 200 locations running at the time.
To help pay vendors "on a priority basis for goods and services ordered and received from this point forward," Brookstone said it has secured roughly $30 million in post-petition financing through Wells Fargo Bank and Gordon Brother Finance. It hired Gibson, Dunn & Crutcher and Young Conaway Stargatt & Taylor as legal advisors, Berkeley Research Group as a financial advisor, and GLC Advisors & Co. as its investment banker.
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