Brookstone, a retailer that is well known in malls all across Illinois, is facing bankruptcy. Reports indicate that the store is in debt for around $200 million. Sales have been falling steadily for some time. The recession forced people to stop buying extras or luxury goods, which is much of what the store sells.
As part of the bankruptcy process, Brookstone is projected to be sold to Spencer Spirit Holdings Inc. for around $147 million. There is still going to be an auction, so it is still possible that someone else could end up being the winning bidder. However, Spencer Spirit is the clear frontrunner at this time. If the company, which is known for selling costumes, does not prevail in the auction, it will receive $3.7 million in compensation.
For Brookstone, this could be something of a fresh start. The stores are not expected to close or even change all that much. The owners have stated that they plan to continue operating all of the locations as they are right now and offering the same goods. The reduction of debt could be accompanied by a restructured plan to make the company profitable again.
When companies have serious financial problems, it is necessary for the owners to find out how the laws can work to keep them in business. Declaring bankruptcy does not always have to mean that the doors are going to close. There are legal ways for companies to eliminate a lot of their debt, rearrange the structure that they use, and set new plans in motion so that they can start being profitable once again.
Source: Chicago Tribune, "Spencer buying Brookstone out of bankruptcy" No author given, Apr. 03, 2014