Merrimack, New Hampshire-based Brookstone, a technology and travel gadget company owned by the Chinese conglomerate Sanpower Group, has filed for Chapter 11 bankruptcy and will be using liquidators to assist in the closing of its 101 mall stores, noting the severe decline in mall traffic and the purchase of specialty items such as those carried by Brookstone from online retailers. There will be a mass layoff of store personnel as well as employees deeper in the management and supply chain.
The company will attempt the Chapter 11 restructuring to keep their airport, e-commerce, and wholesale channels as viable assets to be sold to an investor group. Some business analysts are also blaming management errors, logistics, and quality and technical problems. The management apparently lost some of its vendors by attempting to persuade them to transact business using the Yuan as a primary payment.
It appears that the bankruptcy is to reduce costs to assist in the sale of the company that would now be unencumbered by claims relating to store leases and vendor obligations. This will be the second bankruptcy for Brookstone which wags are calling a Chapter 22 filing (A Chapter 11 Reorganization done twice.) The Sanpower Group bought Brookstone out of its 2014 bankruptcy.
Brookstone CEO Piau Phang Foo applied the corporate spin noting, “Today we have taken several important steps to restructure the business and ensure that Brookstone will be well-positioned to succeed for years to come. The decision to close our mall stores was difficult, but ultimately provides an opportunity to maintain our well-respected brand and award-winning products while operating with a smaller physical footprint.”
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