Regional chains have suffered in the wake of the Covid pandemic.
Huge names including Modell's, Olympia Sports and Christmas Tree Shops were not able to recover after social-distancing shutdowns devastated their businesses.
It's easy to blame the internet for the many recent retail bankruptcies, but that's not actually what happened. Chains like Bed Bath & Beyond and Tuesday Morning failed because they took on too much debt in a market where high interest rates have made borrowing difficult.
Related: Another distressed vodka brand files for Chapter 11 bankruptcy
The Covid pandemic forced many retailers to close for an extended period or operate under severe restrictions. That loss of revenue was compounded by higher supply chain costs and rising labor prices.
Basically, companies that weren't in great financial shape in the first place lost revenue for months. When the pandemic eased, they faced higher costs in multiple areas. Add in that vendors have become very wary about extending credit to struggling companies, and it's a recipe for disaster.
Retail bankruptcies have become common but many seemingly come out of nowhere. Regular customers might notice a chain having less inventory or being out of common items, but sometimes it's not easy to see what's happening until a company files for Chapter 11 bankruptcy.
Image source: TheStreet
Bob's Stores filed for Chapter 11 bankruptcy
Bob's Stores is a New England favorite that mixed discount clothing with sports-team apparel. It was an unusual chain that was driven into bankruptcy at least partly due, you guessed it, to the Covid pandemic.
Its filing was unexpected although it was proceeded by corporate layoffs and the closure of a distribution facility.
"Bob's Stores will close all of its Bob's locations and liquidate all inventory, as part of the Chapter 11 restructuring petition filed on June 18, 2024," the company said. "Despite making swift and aggressive changes to the company's structure and operations, Bob's Stores was unable to secure the finances needed to maintain operations."
The chain's sister brand, Eastern Mountain Sports, remains open and is not affected by the Chapter 11 filing.
Bob's reported in its bankruptcy filing that it had 369 creditors. The company has assets of between $50 million and $100 million and an equal amount of liabilities.
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Bob's sets its final day in business
It's important to note that Bob's Stores is not the same as Bob's Discount Furniture. Both are New England-based chains, but the furniture company has made very clear that it has nothing to do with the bankrupt clothing retailer.
"Bob's Discount Furniture is not affiliated with Bob's Stores, the clothing/footwear retailer which recently announced its closing. Bob's Discount Furniture is open, thriving, and growing across the country," the furniture company posted July 9 on the X microblogging platform.
Bob's Stores began going-out-of-business sales on June 28, with discounts of 30% to 70%. All the chain's stores will close for good on July 14.
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"This event marks a final opportunity for loyal customers to take advantage of massive savings on everything in store," the company said in a news release. "Top-selling items from the most popular brands will be discounted and will sell out very quickly. Customers are encouraged to visit their nearest Bob's location early to take full advantage of the best selection of discounted merchandise before it sells out."
All sales are final during this closeout process and no returns will be accepted. Gift cards are being honored during the going-out-of-business sale.
