Commercial Retail News in 2017: Why Are So Many Well-Known Businesses Reorganizing?

This year is just a little more than half over, and many consumers are surprised to see so many of their favorite—and most familiar—retailers either throwing in the towel or filing Chapter 11 to perform a serious reorganization and look to a stronger future.

If you are a business owner, then you understand how crucial it is to fight to stay relevant for your customer base, to roll with changes within the industry—and most of all, to make your products inviting and convenient for your customers to purchase. Online shopping is hardly a new concept anymore, but in just the past few years it has become much more prevalent. The hesitation and even suspicion that may have once been there for many consumers has been lifted as shopping from the PC or mobile device has become a completely mainstream activity—and for some, even an addiction. Despite efforts to allow for online purchases, big discounts, and more, retailers such as Radio Shack, Payless ShoeSource, and The Limited have filed for bankruptcy this year.

Bloomberg reported that with 14 chains filing Chapter 11 by the end of April, they had nearly exceeded retail chain bankruptcies for 2016. Since then, Gymboree Corp. has also filed—showing that children’s clothing is not a safe market either. A wide range of retailers are being forced to reorganize, making it seem as if no one is safe. Those who have filed for Chapter 11 are closing many stores, and large corporations that have not filed, such as Sears and J.C. Penney, are still also closing hundreds of stores.

While many locations will disappear and unfortunately, some will lose jobs, most of these large retailers preface their bankruptcy filings by announcing that they hope to come back bigger and better. Chapter 11 allows for businesses to stay in operation while holding debt collectors at bay, giving them around four months to form a realistic repayment plan that everyone can agree on. The bankruptcy court does take a great deal of control in terms of any major business decisions that are made centered around finances, but with the protection of the court, major retailers—as well as small businesses around the US—can take commercial bankruptcy as a positive opportunity, while some creditors can also look forward to getting paid.

If you are currently having any legal issues in your business that require resolution, call Shane Coons now at 949-333-0900 or email us at Shane.Coons@seclawoffices.com. We can review your case, answer your questions, and help you decide how to move forward. We are here to help!

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Commercial Retail News in 2017: Why Are So Many Well-Known Businesses Reorganizing?

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