Although corporate bankruptcies fell for the year, it appears many retailers are still having significant problems staying away from the bankruptcy bug.
bankruptcy filings exceeded 1.5 million in 2010, a 14% increase and the
highest number since 2005 reform, business bankruptcies actually
declined by 1%, according the Supreme Court's 2010 Year-End Report on
the Federal Judiciary. Still, retailers have struggled amid an economic
recovery that can be characterized as underwhelming at best to date.
next victim, if widespread speculation proves corrected, could be book
retailer Borders. Experts and publications such as the Wall Street
Journal and The Street have grown increasingly loud in their predictions
that the company will need to enter Chapter 11 bankruptcy. In fact, a
poll conducted by the latter found that more than 2/3 of respondents
believed a Borders Chapter 11 filing was not only likely, but imminent.
At least one publisher reportedly has stopped all shipment of books to
the retailer following its quiet admission last month of potential
delays in vendor payments on the horizon.
retailer Loehmann's appears to be heading in a different direction. The
company, which filed for bankruptcy in November, is on the brink of
emerging from its Chapter 11 much healthier as a judge has given
preliminary approval on its restructuring plans. Creditors must vote on
the plan by February 2, and a follow-up court hearing is slated for
February 7 for final confirmation, as long as there are no snags along
the way. Loehmann's has noted it plans to keep most of its remaining
near-50 stores operating in a business-as-usual capacity and plans to be
financially solvent during the present year.
(Editor's Note: See full version of this story in the upcoming edition of NACM eNews, available Thursday afternoon).
Brian Shappell, NACM staff writer