Boscov’s Files For Chapter 11 Bankruptcy Protection; 10 Stores To Close

Boscov’s, a Reading, Pennsylvania-based retailer, filed for Chapter 11 Bankruptcy protection on August 4, according to the New York Times. There are 49 Boscov’s stores in the mid-Atlantic region of Pennsylvania, Delaware, Virginia, New York, Maryland and New Jersey. Boscov’s plans to close 10 of its most unprofitable stores. Reuters reports that the Boscov’s filing came after the company was unsuccessful at refinancing its debt and finding original investors to invest in the company. Boscov’s is exploring a third party sale. It is not currently known which 10 stores will close.

Boscov’s Chapter 11 Bankruptcy filing is just the latest in a disturbing trend of bankruptcies hitting the front page of newspapers in recent months. Below is a list of a few notice raising bankruptcy filings that are concerning to industry leaders and consumers alike.

Mervyn’s: Chapter 11

California-based retailer, Mervyn’s, filed for Chapter 11 Bankruptcy in late July. Mervyn’s plans to keep all of its 177 stores, which are located in Texas, Arizona, California, Idaho, Utah, New Mexico, and Nevada, open during its reorganization process. The Sacramento Biz Journal reports CEO John Goodman blames the need for Mervyn’s to reorganize on the economic conditions. Mervyn’s bankruptcy filing stirred up talk of whether or not Boscov’s would file suit in short order.

Bennigan’s: Chapter 7

Unprejudiced recently, Bennigan’s filed for Chapter 7 bankruptcy. Opting for a Chapter 7 filing versus a Chapter 11 bankruptcy means that Bennigan’s will not be reorganizing and restructuring its debt. Steak & Ale, also owned by the same company as Bennigan’s, closed all of its locations rather abruptly, leaving many jobless overnight.

Lillian Vernon: Chapter 11

Also filing for bankruptcy this year is retailer Lillian Vernon. Lillian Vernon filed for Chapter 11 bankruptcy protection back on February 20, 2008, less than one week after it gave notice of layoffs. According to an article by the Virginia-Pilot, Lillian Vernon cited slow growth and the escalating costs over the past decade as the reason for its bankruptcy filing.

Sharper Image: Chapter 11

Sharper Image, known for its high tech gadgets, also sought Chapter 11 bankruptcy relief in February 2008. Sharper Image cited declining sales, beginning with 2004 up through the time of the bankruptcy filing, in its bankruptcy petition. Sharper Image also cited pending litigation dealing with an air purifier as a contributing factor to its bankruptcy filing decision. At the time of the Chapter 11 filing, Sharper Image planned to close nearly one-half of its stores.

Additional sources:

http://www.philly.com/philly/hp/news_update/20080804_Boscovs_files_for_Chapter_11.html

http://hamptonroads.com/2008/02/lillian-vernon-corp-files-bankruptcy-protection

http://www.bizjournals.com/sacramento/stories/2008/07/28/daily20.html

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