A national article pointing to a mass retailer's current financial challenges notes a collective nemesis that is sorely testing mall-based fixtures across the country.
Its authors spotlight "digital competition, nimble physical competitors and smartphone shopping" for the demise of many national names and brands that for decades appeared to have flawless business models.
Front and center in the news this week is massive retailer Bon-Ton Stores, which until recently had 260 outlets operating nationally via multiple department store chains it owns. Bon-Ton reportedly has about $1.75 billion in outstanding debt.
The New York-headquartered company seeks to deal with that through a Chapter 11 bankruptcy restructuring. Although its principals want to keep all existing stores operating, sources say that a bankruptcy solution might also entail material downsizing of the company's operations or an outright liquidation.
The retailer's bankruptcy strategy is one that is being increasingly employed by other cash/debt-straddled players in its industry.
As we note on our website at the Manhattan commercial law firm of Rich Michaelson Magaliff, LLP, Chapter 11 certainly merits a close look by many commercial clients seeking solutions to notably stark financial challenges. A commercial bankruptcy can sometimes offer the best chance for a company to reduce debt, restructure understandings with creditors and reposition a filer for continued business success.
That is not always the case, though. Recourse to Chapter 11 in some cases might not be an enterprise's best option in times of trouble. We stress on our site that "other forms of bankruptcy or nonjudicial alternatives may be available."
Business principals with questions or concerns regarding outsized debt levels and other operating challenges can obtain guidance and knowledgeable representation from a proven New York City commercial law firm.