2 More Retailers File for Bankruptcy
In a sign of the times, two more traditional brick-and-mortar retailers have recently filed for bankruptcy protection. National Stores, Inc., parent company of retail brands such as Fallas, Anna’s Linens, and Factory 2-U, announced that in addition to filing for bankruptcy reorganization, it will be closing 74 of its 344 stores. National Stores, which is headquartered in Gardena, Calif., operates in 22 states and Puerto Rico.
Another California-based retailer, Gump’s, a San Francisco luxury department store founded in 1861, filed for bankruptcy protection last week. The company said it is seeking a buyer, and plans to liquidate merchandise to pay off lenders. Gump’s expanded beyond its San Francisco store location with a catalog in the 1950s. Its online and catalog sales now account for more than 75 percent of total sales and more than 90 percent of sales are outside the Bay Area, the company said in May. Three investment firms bought Gump’s in 2005, and the company has added shareholders since then, according to the bankruptcy filings.
Total Retail's Take: As traditional brick-and-mortar retailers struggle to keep pace with the growth of e-commerce competitors, many are seeking protection from bankruptcy — i.e., they continue to operate but their pre-Chapter 11 debts are frozen as they develop reorganization plans that are acceptable to their creditors. Such is the case for National Stores and Gump's. Part of those reorganization plans should include a way to leverage their physical locations as valuable touchpoints in the customer purchase journey, whether it be a place to purchase product, provide a venue for product research, offer a hub for omnichannel services (e.g., buy online, pick up in-store; ship online orders from their stores; accept online returns in-store, etc.), among other things. Use physical stores to your advantage, and don't let them be an inhibitor to future growth.
