Bankruptcy

Crafts Retailer Joann Files for Bankruptcy – The New York Times

by dldamore

Crafts Retailer Joann Files for Bankruptcy – The New York Times:

Joann, whose outlets were once called Jo-Ann Fabrics, said its stores, roughly 800 nationwide, would continue to operate as it closes the deal, which is expected as early as next month.

The retailer, which sells yarn, fabrics and home goods, has been coming down from a short-lived sales boom during the pandemic lockdowns when there was a frenzy in consumers spending on at-home projects. But that has faded in the past two years, with consumers pulling back on discretionary spending as inflation remains relatively high, which has challenged the retail sector at large.

One Man vs. McKinsey: A Billionaire Says the Consultancy Has Rigged the Bankruptcy System – The New York Times

by dldamore

Contrary to the public imagination, bankruptcy courts are not where businesses go to die. In fact, there is potential for creativity and rebirth in Chapter 11, the uniquely American law for corporate reorganizations.

“Most countries just liquidate companies,” said Richard Gitlin, a bankruptcy lawyer specializing in international debt restructurings who has worked with Mr. Alix in the past. “We are the best at restructuring the resources, taking the good part of the business, adding professional management and making it profitable.”
— Read on www.nytimes.com/2019/04/11/business/jay-alix-mckinsey-bankruptcy.html

*Really interesting article. The snippet above is just one of many interesting sections of this article.

Filene’s Files for Chapter 11 Protection

by dldamore

Filene’s Files for Chapter 11 Protection:

Discount retailer Syms and its Filene’s Basement subsidiary filed for Chapter 11 bankruptcy protection with plans to liquidate.

(Via WSJ.com: US Business)

 

Sometimes it’s not a good idea to buy things in a bankruptcy sale. In a weak economy and with tight credit the margin of error gets smaller. If the economy was growing or strong, this could work.The weak economy and integrating in the assets of Filene’s Basement distracted Syms management from what they should have been focusing on … creating customers for their own stores.

When I think Syms, I think suits. Well, in a weak economy people are not looking for new suits. They might have considered expanding their brand to comfort-casual to get more people in the stores. People want to look good and be comfortable with what they are wearing.

Notes:

The U.S. economy is changing. Some expanding trends are, contracting, consulting and casual dress.

Certainly there are some people still buying suits in a weak or contracting economy. Some firms still have old school dress.  When facing increasingly intense competition it’s important to focus, focus, focus if you want to win and survive. The weak players will be eaten by the stronger players or by some adjacent market that destroys ones own market segment. In the Syms example it’s professional dress. The casual dress market is adjacent to and expanding, at the same time also taking away customers.