Tyler residents are likely familiar with the sight of a Brookstone store in a shopping mall or airport. The company started over 50 years ago as a mail-order business selling rare tools and other devices, opening its first physical storefront in the early 1970’s. It soon grew into a purveyor of all manner of quirky home products and was an especially popular staple of the thriving shopping mall scene throughout the 1980’s and 1990’s.
As consumers shifted more of their spending away from malls, however, Brookstone struggled. It first filed for bankruptcy four years ago and was acquired by a Chinese company that kept most of its stores open. Recently, Brookstone filed for bankruptcy for a second time, listing debts of between $100 million and $500 million, with assets of only $50-$100 million.
As part of its Chapter 11 bankruptcy filing, Brookstone has prepared a plan to return to profitability which involves closing all of its shopping mall locations in the United States – more than 100 stores. Then, the company will shift its focus to online sales and its 35 shops located in airports, which will stay open. The company hopes that the move away from shopping malls, along with the debt relief obtained through Chapter 11, will help it become successful again.
Businesses often undergo this kind of reorganization when a shift in the marketplace leaves them struggling financially, even though at least some of their assets remain sound. A legal professional can assist businesses through this process, from the initial filing through the drafting of a reorganization plan and the eventual emergence and return to operations. This can help companies get back on their feet and return to profitability.