All Bankrupt Retailing Companies 2015 Chapter 11 and Chapter 7 Filings

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A&P Retail Grocery Legacy Ends: An Oldest US Retail Chain Bankruptcy

Bankruptcy of an Oldest US Retail Chain Ends A&P Retail Grocery Legacy
2015 is 156th and Last Year for Great American & Pacific Tea Co. Public Domain Photo

Reflecting a changing, unpredictable, and volatile global retailing environment, the number and size of Chapter 11 and Chapter 7 filings by U.S. retailing companies was significant from the beginning of  the 2015 calendar year.  RadioShack, Cache’, Wet Seal, and Target are just some of the retail chains that found themselves in bankruptcy court in 2015.

This is an image gallery of all retailing companies that were in some stage of bankruptcy proceedings in 2015.   Find details about all Chapter 11 and Chapter 7 U.S. retail industry bankruptcy proceedings including total debt, store closings, buyouts, downsizings, and future plans.  This is a complete roundup index bankrupt retailing companies for 2015.

After surviving in the grocery retailing business for 156 years, the oldest grocery retailing chain, the Great American & Pacific Tea Company filed for bankruptcy protection on July 20, 2015. The end of one of the oldest retailers in U.S. history is the end of a grocery retailing legacy.

When it filed for Chapter 11 protection in July 2015, the Great American & Pacific Tea Company (A&P) company had just 300 stores remaining in its grocery store chain, located along the East Coast of the U.S.  This was not surprising to retail industry analysts and onlookers, since this is not the first time that the A&P company has filed for bankruptcy.  

In December 2010 The Great Atlantic & Pacific Tea Company filed for Chapter 11 protection as a way to reorganize its finances. That bankruptcy reorganization resulted in the closing of 25 stores, the layoff of about 1,000 employees, and union concessions of about $600 million.

But the 2015 bankruptcy proceedings will not end in a reorganized A&P retail grocery store chain.  Rather, it will be the end of the 156-year A&P grocery retailing legacy.  All A&P, Pathmark, Waldbaum's and Food Emporium stores will be either closed or sold.  That means that before the end of 2015, about 25,000 unionized grocery store employees will be out of a job, along with some 3,500 non-unionized A&P employees.

Some of those unemployed A&P workers will likely be able to find jobs with other supermarket chains that purchase the stores and/or leases now occupied by A&P supermarkets.  It is unlikely that all 300 A&P stores will be purchased for some of the same reasons why the chain is going out of business in the first place.  

For example, because of the age of the A&P supermarket chain and the length of time that some A&P stores have been in the same location, the average A&P store size tends to be smaller than newer, more modern supermarket competitors.  The largest U.S. grocery retailing chains don't want to take over the smaller A&P spaces.  And the smaller specialty grocery retailers like Aldi and Trader Joe's are reportedly extremely selective when choosing their real estate, which needs to be located in an area with a demographic match to their target "specialty" consumer.

The initial plan for the dissolution of the A&P retail chain includes the sale of 120 of its stores, which would leave 180 stores to be closed down completely.  The exact fate of the A&P, Pathmark, Waldbaum's and Food Emporium stores will remain uncertain until proposed sales and closings receive approval by the bankruptcy court.

It might be assumed that the oldest grocery retailer in the U.S. would have the advantage of time and experience to beat out its competitors.  But, in fact, the A&P chain seemingly got stuck in the past, lost touch with quickly changing consumer preferences, and lost out to more nimble and innovative retail chains. 

But it deserves to be noted that a grocery retail chain could not stay in business for a century and a half without a certain amount of innovation and the ability to master change.  Starting out as a tea and coffee company, A&P was more like Starbucks than Kroger in the 1800's.  It sold just tea and coffee in 70 retail stores and via mail order before it transformed itself into the first U.S. retail store chain in the 1880's, which is referred to as the birth of modern food retailing.  

A&P introduced to the U.S. retail industry what Henry Ford introduced to the U.S. automobile industry.  That is, standardization and scale.  A&P created the first vertically integrates supply chain, manufacturing its own private label food products, which it then delivered to its own stores using an integrated supply chain of company-owned warehouses and trucks.  

A&P eliminated store-carried credit accounts and was the first to make grocery shopping a cash and carry business.  And A&P was the pioneer of private label grocery store brands, building the Eight O'Clock, Ann Page, and Jane Parker brands into some of the most well-known food brands in the U.S. at the time.

In 1930 The Great Atlantic & Pacific Company was the largest retail company in the U.S., with revenues equivalent to $39.6 trillion in today's dollars.  That means the A&P retail chain was 83 times more successful in the U.S. in its heyday than the largest retail chain in the world - Walmart - is today.  At its peak, A&P had more than 6,000 retail stores and A&P built that success without any global presence. The Great Atlantic & Pacific Tea Company was still ranked as one of the top 200 largest retail chains in the world

So, while it's easy to look at the old, tired, and somewhat pathetic 300-store chain and conclude that U.S. grocery retailing will be better off without it, it's good to remember that today's U.S. grocery retailers were built on the successes and contributions of the A&P chain. In the history of the U.S. retail industry The Great American Atlantic & Pacific Company was the biggest and the best.  And it's unlikely that any U.S. retail chain in the present or future will ever top that.

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SkyMall Flight Catalog Bankruptcy Erases Past Debt, Not Future Business

SkyMall Flight Catalog Bankruptcy Erases Past Debt, Not Future Business
Iconic In-Flight Retailing Brand Saved in Bankruptcy Auction. Public domain photo

The final approval of the debt liquidation plan for SkyMall LLC on August 5, 2015 erases approximately $15 million in past debt for the company that produced the in-flight catalog for bored airplane travelers, but will not mark the end of future retail business for the SkyMall brand.

Approximately $15 million in unsecured debts was owed by the company that distributed that SkyMall catalog stuffed in the back pocket of just about every seat on every airplane of every major airline in America.  Even though there were 850 million potential customers on U.S. domestic flights in 2014, the SkyMall catalog reportedly generated just $15.8 million in revenue in the first nine calendar months of 2014.

SkyMall was not so much a retailer as it was a retailing vehicle.  Every product in the catalog was there as a paid advertising placement.  Companies paid as much as $130,000 per month to place their products in front of bored airline passengers who forgot to bring any non-electronic distractions for the 30 minute takeoff and landing parts of their airline travel.  

So SkyMall wasn't the acquirer and seller of the eclectic and pricey merchandise in its catalogs.  And SkyMall didn't warehouse or fulfill any of the products that were sold in its catalogs.  It was the responsibility of each company to do its own dropshipping and customer service.  SkyMall just processed the retail orders and payments.  The same retailing model applied to the SkyMall website.  

SkyMall reportedly also made a majority of its revenue as the loyalty reward partner of Capital One credit card, Marriott Rewards, and Caesars Entertainment (which also declared bankruptcy in 2015).  SkyMall made money from these three companies as the facilitator of point redemption for merchandise.  Much of this and all information about the SkyMall business is speculative since SkyMall was a privately held company that didn't publicly disclose much of anything until it was taken over by the publicly traded Xhibit Corp. in 2013. 

Although the demise of the SkyMall business was anecdotally attributed to the widespread use of electronic devices for entertainment on airline flights, it seems the SkyMall business was a victim of the overall bad business practices of Xhibit.  The parent company sold off the loyalty reward part of the SkyMall business in 2014 in order to pay down the debt of other parts of its business.  

it's unclear exactly what the other parts of the Xhibit business actually were, but it does seem clear that the Xhibit leaders were disinterested or incapable of maintaining the SkyMall retailing model.  According to a report by the Wall Street Journal, Delta Air Lines ended its relationship with SkyMall in November 2014, and Southwest Airlines had plans to stop carrying the catalog sometime in 2015.  

As part of the 2015 Xhibit bankruptcy proceedings, the SkyMall brand and its assets were purchased for $1.9 million by C&A Marketing based in New Jersey in March, 2015.  At the time of the purchase, C&A announced that it planned to revive the SkyMall business by bringing it "back to its roots, back to the brands, products and technology that relate to all travelers."

Making failing retail brands relevant again is becoming a specialty of C&A, having purchased and successfully revitalized the Ritz Camera & Image brand just two years ago.  And if C&A is a marketing company with the know-how that can leverage brand recognition into retail sales transactions, then SkyMall's iconic brand status was a bankruptcy auction purchase that should pay off.  

Despite some major turbulence and a crash landing, it seems that the well-known, sometimes-read, and often-ridiculed SkyMall catalog will live to fly another day.

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The Biggest 2015 Retail Bankruptcy is RadioShack Closing, Selling Out

The Biggest 2015 Retail Bankruptcy is RadioShack Closing Selling Out
Updated RadioShack 2015 Bankruptcy, Store Closing Details, Future Fate. © Barbara Farfan for About.com

The number and size of U.S. retail industry bankruptcy filings in 2015 was significant, but by far the biggest 2015 retail bankruptcy action was filed by RadioShack. The RadioShack brand, as it has been known for 94 years, will cease to be after RadioShack is finished closing retail stores and selling its way out of $1.38 billion in debt.

After being in business for 94 years, RadioShack filed for Chapter 11 bankruptcy protection on February 5, 2015.  At the time of its Chapter 11 Bankruptcy filing, RadioShack had approximately 5,000 company owned stores in the U.S., more than 1,000 dealer franchise stores in 25 countries, and  $1.38 billion in debts owed to as many as 100,000 creditors.  Prior to its bankruptcy filing, the RadioShack retail chain  had not been profitable since 2011. 

RadioShack had previously announced in March, 2014 that it would close 1,100 of its retail stores in a effort to improve its financial performance.  Only 175 of those retail store closings actually happened in 2014, however, because lender agreements blocked the company’s ability to proceed with its drastic downsizing plans.  

The blocked store closings led the company into bankruptcy court nearly a year later, when RadioShack was given permission to immediately begin liquidation sales at 1,784 retail locations.  The initial bankruptcy plans also included selling between 1,500 and 2,400 retail store locations as part of its debt restructuring.  The private equity fund Standard General plans to purchase the stores, and work with Sprint to create a store-within-store concept in most of them.

On February 27, 2105, GameStop received bankruptcy court approval to pay $15,000 each for 163 RadioShack leases, which will be transformed into Sprint Mobile retail store locations. 

On March 2, RadioShack requested to pay a total of $2 million in retention bonuses to 8 RadioShack executives.  Objections to these bonuses will be settled by bankruptcy court officials.

RadioShack was founded by Thodore and Milton Deutschmann in Boston, MA in 1921.  Originally RadioShack sold ship radios, ham radios and radio parts.  RadioShack was acquired by the Tandy Corporation in 1962.  In the 1970s RadioShack sold a microcomputer that was as popular as IBM or Apple computers.

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Cache Second Bankruptcy May End Its Luxury Fashion Retailing History

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Chapter 11 Bankruptcy, Store Closing, 2015 Reorganization Updates. © Barbara Farfan for About.com

When Cache filed for Chapter 11 bankruptcy protection on February 4, 2015, it was the second time that the women’s luxury fashion retailer had sought help in bankruptcy court. But bankruptcy for Cache the second time involves significant store closings and may mark the end of Cache’s retailing history. Get Cache Chapter 11 bankruptcy, store closing and 2015 reorganization updates here.

At the time of its bankruptcy filing in 2015, Cache had debts between $50 and $100 million and had not generated a profit for the previous 9 quarters.  Salus Capital Partners LLC provided $22 million in debtor-in-possession (DIP) financing and Cache’ was actively seeking a stalking horse bidder to purchase the company.  During the bankruptcy process, the company’s stock would get delisted from NASDAQ.  

As part of the reorganization process, Cache reported that it planned 218 store closings in 2015. The Cache leaders originally planned to find a buyer while in the bankruptcy process in order to keep the Cache retail chain operating. Without a viable purchase offer, the chain would have to be liquidated, but the rights to the retail brand identity would be sold so that a Cache retail enterprise could be revived in the future.  

In March 2015, the entire Cache retail chain was sold in an asset sale to Great American Group LLC for just $18 million.  Store closing liquidation sales were held at all remaining Cache' brick-and-mortar stores and the Cache retail chain ceased all retail operations and went out of business in 2015.  

Cache was founded in 1975 under the name Atours Incorporated, and takes credit for bringing luxury brands like Armani and Versace to the U.S.  The company grew to a chain of 30 retail stores before it started losing money, and filed for Chapter 11 protection in 1986.  The company survived that reorganization process without having to close a single store.

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Wet Seal Stores Go On the 2015 Bankruptcy Auction Block to Keep Afloat

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Teen Clothing Retailer Seeks Buyers and Bids to Stay in Business. © Barbara Farfan for About.com

From bikini shack to bankruptcy court, the Wet Seal retail chain is putting itself up for auction in 2015 in an effort to stay afloat. Will store closings, equity buyers, and bankruptcy bids be enough keep the teen clothing retailer alive?

The Wet Seal teen clothing retail chain based in Foothill Ranch, CA filed Chapter 11 bankruptcy on January 16, 2015.  In 2014, Wet Seal closed all of its Arden B branded stores, and prior to filing its Chapter 11 bankruptcy papers, Wet Seal had announced its plans for 338 store closings in 2015.  

At the time of its Chapter 11 bankruptcy filing, Wet Seal had between $100 million and $500 million in debt and just $31 million in cash.   

B. Riley Financial Inc. provided a $25 million debtor-in-possession (DIP) loan, which will be converted into an 80% equity stake in the company on March 5th, unless Wet Seal receives competing bids for sponsorship or a bid to purchase the company.  

Wet Seal was founded in Newport Beach, CA as a single shack which sold bikinis.  It has been a publicly traded company since 1990.

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Family Christian Stores Bankruptcy Erases Millions in Publisher Debt

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Prayerful Reorganization to Serve Customers, Vendors, Charities. © Barbara Farfan for About.com

When Family Christian Stores filed Chapter 11 Bankruptcy on February 12, 2015, the intention was for the retailer of Christian books and products to emerge in 60 days debt free, erasing $11.5 million owed to six different publishing companies. The Family Christian Stores CEO declared this Chapter 11 reorganization strategy to be ​a prayerful decision that would best serve customers, vendors, and charities.

Family Christian Stores filed Chapter 11 Bankruptcy on February 12, 2015.  The intention behind the Chapter 11 filing was not to cease operations, but rather to complete a Section 363 sale of its assets and operations to a newly formed subsidiary of Family Christian Ministries.  When the sale is completed in approximately 60 days, the 266 Family Christian Stores will still be operating in 36 states, debt free.  Reportedly the bankruptcy strategy, as proposed, would erase $11.5 million owed to six publishers.   

In a press release, President and CEO of Chuck Bengochea said this about the Chapter 11 plan that will stick publishers with millions in unpaid debt, “We have carefully and prayerfully considered every option. This action allows us to stay in business and continue to serve our customers, our associates, our vendors, and charities around the world.” 

The company was founded in 1931 in Grandville, Michigan, by brothers Peter J. (Pat) and Bernard (Bernie) Zondervan, and the retail chain was originally called Zondervan.  After expanding both its Christian retail and Christian publishing business operations over the next 53 years,  in 1984 the Christian books and products the company was found to have accounting irregularities which his millions of dollars in losses from its shareholders.  After clearing both lawsuits and SEC sanctions, Zondervan's retail stores were renamed Family Bookstores in 1993 and Family Christian Stores in 1997.