10 Huge Stores in the US That Unexpectedly Went Bankrupt
By Nora Mathe
Businesses come and go, but some staples that we can always count on seem to be the large retail chains.
We most often think of these franchised retail stores as unmovable giants that cannot go bankrupt, yet they often still do. With the changing world, some shops simply become redundant, and the products become useless.
Others are pushed off the market because of the ease of online shopping and the variety of products consumers can choose from. We are counting down these 10 huge stores in the United States that surprisingly went bankrupt!
Friedman’s was a mid-tier jewelry company founded in 1920. Their focus was on selling jewelry for a low price to lower to middle-income populations between 18 and 40 years of age. The store chain was the third largest of its kind in the US before they filed for bankruptcy in 2008.
At the time of liquidation, the company reportedly had $448m in assets. The reason for bankruptcy? The 2008 recession occurred, when lower-income families stopped spending money on luxuries such as diamonds and jewelry. At the time of closure, Friedman’s had 445 locations around the country.
The company, which usually pops up in malls and airports, selling massage chairs and other sleep and wellness related items, has filed for bankruptcy twice in the last 5 years. At first, in 2014, they managed to pull through and continued operating with 200 locations.
The second time, in 2018, the store chain claimed bankruptcy again, keeping their 35 airport locations and their online store open. CNN reports that the chain has secured a $30 million loan to finance operations while they look for a buyer. In a bankruptcy filing, Brookstone said it had liabilities totaling up to $500m and assets between $50 to $100 million.
8. Sports Authority
The first Sports Authority store was opened in 1928, and the last one closed in 2016. The company selling clothing, accessories, and sports equipment went out of business and filed for bankruptcy, first announcing that they would close more than 100 locations out of the 463 they had at the time.
The company’s assets were valued at $1b, but they were eradicated in what is known as the retail apocalypse, their sales dropping due to the convenience and the endless choices offered by online stores such as Amazon. Today, Sports Authority stores no longer exist, and many were bought by Dick’s Sporting Goods, and the company website also redirects to their competitor.
The once large bookstore chain went out of business in 2011, listing $1.275 billion in assets and $1.293 billion in debts in its filing for bankruptcy. With the introduction of eBooks into the market and Amazon’s Kindle eBook reader appearing on the market a few years prior, the sales of print books dropped significantly.
Rival bookstore chain Barnes & Noble ended up acquiring Borders’ trademarks and customer list, and the Borders website was redirected to them as well. In 2011, the website was still running for a while, but it redirected all browsing customers to purchase their items through Barnes & Noble. According to Fortune magazine, book sales are experiencing a revival today, as eBook sales whither.
Blockbuster used to be a fixture in every American strip mall and shopping center, but it filed for bankruptcy in 2010. The reason behind this is quite simple: what the store had to offer was no longer needed. The video rental store was selling a product we did not need in 2010.
With the emergence of streaming services such as Netflix and Hulu and the decline of DVD and even Blu-Ray, Blockbuster could not make enough profit. On their bankruptcy file, the company claimed to own $1.54m in assets.
5. Radio Shack
The first Radio Shack was opened in 1921, but a long legacy ended when the company filed for bankruptcy in 2015. The electronics retail store was affected by problems faced by Blockbuster and other stores, as well.
Online shopping has become so widespread that most American people buy their electronics online. Radio Shack reportedly had $1.59b in assets and over 4,000 stores all over the States. Currently, it’s not completely closed down; it partnered with HobbyTown USA, and their products are chosen by their current parent company’s individual stores.
4. The Great Atlantic & Pacific Tea Company
The A&P grocery store chain was over 150 years old when it had to file for bankruptcy. The company’s assets were valued at around $1.6b and had over 15,000 locations at its peak in 1930. In 2015, at the time of its liquidation, A&P only had 296 locations and 28,500 employees.
Why did a grocery store run out of business? It was simply defeated by store chains such as Walmart, Costco, and Target for customers in the lower price range, and defeated by Whole Foods for customers who buy higher-priced groceries.
3. Linens ‘n Things
Linens ‘n Things was a company selling home furnishing items such as bedsheets, home textiles, housewares, and other decorative items. The first store was opened in 1974, and it filed for bankruptcy in 2008. Their assets were valued at around $1.7b.
The store chain was closed completely in 2008, then they came back as an online-only brand, but two years later they were bought by the Carlyle Group, a private equity firm. As with many stores on this list, Linens ‘n Things struggled to keep going after the recession and with the abundance of online options to choose from.
2. Circuit City
Circuit City was founded in 1949 and filed for bankruptcy in 2008, after many failed attempts to find a buyer who would keep the company going. The electronics store chain was slow to realize the necessity of online sales, while large stores such as Walmart started popping up everywhere around them, pulling even more of their customers away.
In late 2008, the company started laying off corporate employees, reducing office spaces, and firing employees at stores, as well, but soon after they claimed bankruptcy, having seen that they wouldn’t save enough money by letting go of their workers. Their assets were valued at around $3.75b, and they had a debt of $2.3b.
1. Toys R Us
According to Vox, Toys R Us was at one point considered the most important toy store in the world. The toy selling giant filed for bankruptcy in 2017; after a long and difficult battle with Amazon, they had to call it quits. Amazon sells $5.4b worth of toys annually, and, while Toys R Us still pulled in $792m yearly, they just couldn’t compete with the online giant.
The first store opened in 1948, and in 2017, at the time of liquidation, the company had 64,000 employees in many locations around the world. Initially, they had a deal with Amazon, so they were the only company selling toys through them, but that changed soon and the store was simply pushed off the market.
Go to Buzz.Moneis.com for more entertaining articles about the lavish lives of the rich & famous.
All texts are the intellectual property of this site. The trademarks, names and logos are the property of their respective companies. This site is not part of the Facebook or Facebook, Inc. site. This site is not sponsored by Facebook. Facebook™ is a registered trademark of Facebook, Inc.