Brookstone Company, the iconic mall retailer, announced it has begun the process of closing the company’s remaining 101 locations and is seeking a buyer for the firm. The company cited the "continued deterioration of traditional retail mall traffic" as the reason behind the decision.
To facilitate the sale, the company filed voluntary petitions under chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware in Wilmington. Brookstone has also
“Today we have taken several important steps to restructure the business and ensure that Brookstone will be well-positioned to succeed for years to come,” said Brookstone CEO Piau Phang Foo. “The decision to close our mall stores was difficult, but ultimately provides an opportunity to maintain our well-respected brand and award-winning products while operating with a smaller physical footprint. We thank all our mall store employees and managers who have contributed so much despite an extremely challenging retail environment at malls and our thousands of loyal customers whom we look forward to continuing to serve.”
Foo continued, “Our airport, e-commerce and wholesale business divisions are operating successfully and should prove attractive to a buyer with the financial resources and vision to carry our company into the future.”
Brookstone will continue to operate 35 stores in airports across the United States and its successful e-commerce and wholesale businesses.
Through an agreement with Wells Fargo Bank, NA, and Gordon Brothers Finance Company, the company has secured access to approximately $30 million in post-petition financing to support operations during the sale and restructuring process. The company reinforced it will pay vendors on a priority basis for goods and services ordered and received from this point forward.
Brookstone is filing its customary first-day motions with the court to ensure that all operations continue without interruption. Airport stores will operate on normal hours, employees will be paid, and customer programs, including the use of gift cards and Brookstone Loves Reward Program points, will continue pending court approval, which is commonplace in such cases.
Brookstone’s legal advisors in connection with the restructuring are Gibson, Dunn & Crutcher, LLP and Young Conaway Stargatt & Taylor. Its financial advisor is Berkeley Research Group, LLC (BRG). GLC Advisors & Co., LLC serves as the company’s investment banker.