A more local item: Infinity Spas, a mid-Atlantic manufacturer, is closing its manufacturing facilities and selling itself to a rival. The companies cited "severe reductions in demand" as the impetus for the merger. Infinity's facilities were working at 30 percent of capacity due to the economy.
October 2008 Archives
Regional retailer Value City Department Stores filed for chapter 11 bankruptcy and is planning on closing its stores. The chain, which once operated 66 stores, is down to 37 and plans on rapidly closing 26 of them. Value City is owned by VCHI Acquisition Co. It cited the economic downturn and high fuel prices as key factors in the business slide.
A related Value City article on cfo.com noted that Mrs. Fields' Cookies and Goody's are rapidly preparing to exit bankruptcy, a promising sign in an otherwise gloomy retail landscape. Both companies filed for chapter 11 ealier in the year.
In response to the slowing economy, Target is reducing its 2009 expansion. The discount retailer, noting a shift in spending to household basics, is focusing on top-line sales instead of reach.
Metromedia Steak Houses, owner of the Ponderosa and Bonanza restaurant chains, announced a chapter 11 bankruptcy filing Wednesday. The company reportedly has assets totaling less than $10 million. It is planning a reorganization to "a profitable core" of restaurants, suggesting store closings in the near future.
Metromedia was also the parent company of Bennigan's and Steak & Ale, which closed for good under Chapter 7 bankruptcy this summer.
Regional footwear chain Shoe Pavilion is going out of business and holding liquidation stores at its remaining 64 locations. Shoe Pavilion, once the largest off-price independent footwear store on the west coast, had 117 stores at its peak. The 29-year-old chain filed for Chapter 11 bankruptcy in July in advance of the liquidation.
Shoe Pavilion's web site prompts visitors for a password and subsequently redirects to a Yahoo Stores error page.
Following a report earlier this month about slower store openings, Circuit City is now turning itself all the way around. It has retained Skadden, Arps as a bankruptcy lawyer and is investigating 150 store closings along with raising "emergency funds."
Meanwhile, sector leader Best Buy is launching several Best Buy Mobile stores this month and exploring a European expansion. The linked article here cites Best Buy's bet on mobile as successful compared to Circuit City's HDTV focus, but this page says Circuit City made its share of non-product-related mistakes the past few years as well.
Regional department store Mervyn's, having previously entered Chapter 11 bankruptcy, is expected to convert to Chapter 7 and proceed with a full liquidation of assets. The chain had already closed 26 stores and put their locations up for sale.
Teen retailer Forever 21 was recently considering a purchase of 150 Mervyn's stores in an expansion move, but no deal was closed.
Yesterday's commerce news was a striking 1.2% overall decline in retail sales, the largest in three years.
Notably, sales at electronics and appliance stores plummeted 10.8%, a particularly significant drop. This sector typically suffers during economic downturns as customers see electronics purchases as easy to delay or downgrade.
The Brunswick Corporation, manufacturers of everything from boats to bowling gear, is accelerating its corporate resizing to compensate for market volatility. The company hopes to close four manufacturing centers ahead of schedule. Brunswick cites "the most turbulent economic times in recent history" as the impetus for the acceleration.
Domino's Pizza reported lower earnings due to the credit freeze and was seeking new debt financing. While fundamentally sound, Domino's cited Lehman Brothers as a primary lender, and that it needed to find alternate financiers.
"Our operators face the powerful forces of high commodity prices [and] consumers who are reluctant to spend," said chairman and CEO David Brandon.
Domino's reported an 8% drop in profit on a 4% drop in revenues for the third quarter but expressed confidence in its long-term plans.
The Sharper Image, which filed for bankruptcy in February and sold its remaining assets in June, has forged a licensing agreement for its name. The company has sealed a (surprisingly strong) $540 million, five-year arrangement with Homedics to create products for sale in a variety of retail locations.
Linens 'n Things, the bankrupt bed and bath retailer, is attempting to accelerate its store closings in the declining economy. The company asked a bankruptcy court for permission to begin winding down operations to avoid competition from other retail failures.
Update, October 14: having failed to find a suitor, Linens 'n Things' bankruptcy auction was canceled and liquidation sales will begin Thursday. A lack of available credit in the broader financial markets was cited as a factor in the lack of buyers for the overall business.
Retail cookie maker Archway is ending its United States operations after two subsidiaries filed for bankruptcy Tuesday. Archway cited rising fuel and ingredient costs as reasons for the shutdown. The company's mom-and-pop origins date to 1936. (In a rare bit of editorializing, this writer would like to note that Archway's large chocolate cookies were one of the best dip-in-milk cookies he's tasted.)
Sun Country Airlines filed for bankrupty protection today. Last week Tom Petters, the founder of Sun Country's parent company, was charged by federal agents with fraud and money laundering, and was arrested last week.
Sun Country currently has no plans to change its service or staff levels.
Electronics retailer Circuit City is slowing store openings for 2009 and saying it needs to fix core businesses first. There is no news yet of which stores are delayed and for how long.
Hawaiian clothing and souvenir retailer Hilo Hattie filed for bankruptcy protection Thursday, citing "the rapidly deteriorating economy, historic oil price levels, and the weakening of Hawaii's tourist-driven economy." The nine-store chain, which operates as a subsidiary of a parent company, plans to restructure its debt without closing stores or laying off employees.