Brookstone files for bankruptcy for the second time
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Quirky gadget retailer Brookstone has filed for Chapter 11 bankruptcy protection – again.
But the company has a clear strategy for its survival: closing its 101 remaining mall-based stores in favour of focusing on expanding its airport retail concept – which now numbers 35 stores – selling goods online and wholesaling.
Brookstone has secured US$30 million in bankruptcy financing from Wells Fargo and Gordon Brothers. It said the mall-based store business was no longer viable “following continued deterioration of traditional retail mall traffic”.
But its airport, online and wholesale operations are “operating successfully and should prove attractive to a buyer with the financial resources and vision to carry our company into the future,” said CEO Piau Phang Foo in a statement.
Brookstone was founded in 1965, selling “hard-to-find tools” through Popular Mechanics magazine as a direct-marketing business. It opened its first brick-and-mortar store in 1973.
In 2014 it was placed in Chapter 11 before being rescued by China’s Sailing Capital and Sanpower Group for $174 million.
Questions & Answers
Q.What is Brookstone's strategy for surviving this bankruptcy filing?
What is Brookstone's strategy for surviving this bankruptcy filing?
Brookstone plans to close its 101 mall-based stores. The company intends to focus on expanding its 35 airport retail stores, selling goods online, and wholesaling its products to other retailers.
Q.Why did Brookstone decide to close its mall-based stores?
Why did Brookstone decide to close its mall-based stores?
The company stated that its mall-based store business was no longer viable. This decision followed a continued deterioration in traffic to traditional retail malls, making operations unsustainable.
Q.How will Brookstone fund its operations during the bankruptcy process?
How will Brookstone fund its operations during the bankruptcy process?
Brookstone has secured US$30 million in bankruptcy financing. This funding has been provided by Wells Fargo and Gordon Brothers, allowing the company to continue operating.
Q.Who bought Brookstone during its previous bankruptcy in 2014?
Who bought Brookstone during its previous bankruptcy in 2014?
China's Sailing Capital and Sanpower Group rescued Brookstone in 2014. They acquired the company for $174 million after it had previously filed for Chapter 11.
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