We’re only into the second quarter of 2019 and it seems clear that this could be the year of the chain-retail-store bankruptcy. According to market analysts, retailers in the U.S. have reported the planned closure of nearly 6,000 stores.
The total number of closures exceeds those seen last year, and the trend is expected to continue into the foreseeable future. While a great many of these closures are due to bankruptcy filings by some major retailers, others are cost-cutting measures by chains trying to stay profitable as consumers are increasingly shopping online.
In addition to giants like Sears, other notable bankruptcies of late include Shopko, Payless, Gymboree and Charlotte Russe. Other major chains are not facing bankruptcy but have announced significant store closures to cut costs: GNC, Victoria’s Secret, JCPenney and Family Dollar, just to name a few.
If you’re a struggling small-business owner, this news story carries two important takeaways. First, it demonstrates that even a strong and successful business model isn’t always an effective safety net against major changes in the market (such as the switch to online shopping). In the face of such change, filing for bankruptcy may be a wise and reasonable business decision.
Second, this story also shows that there are alternatives to bankruptcy that can save many businesses. But they often require a willingness to implement major changes, make difficult choices and focus on the sustainability of the company as the top priority.
Making business-saving changes can include working with an attorney who is experienced in both bankruptcy and alternatives to bankruptcy such as debt consolidation, negotiation or settlement.