David Wertheimer: June 2009 Archives

The economic downturn is hitting local stores especially hard. Saddest among those affected are the decades-old establishments suddenly facing bankruptcy or liquidation. Recent news affects a pair of stores in the midwest with particularly long histories:

• In Wisconsin, Conkey's Bookstore is closing for good. The store is 113 years old and on its fifth owner. While the store is beloved in town, the loss of a college textbook contract to Barnes & Noble was a fatal blow to its profits.
  
• Out in Minnesota, Schneiderman's flagship is closing after 40 years in business. The Duluth location has outperformed the one in Meadowland, which is liquidating its inventory.

Appco, the Appalachian Oil Company, is liquidating its assets as part of a bankruptcy proceeding. Appco operates 47 convenience stores in Tennessee, Virginia and Kentucky in addition to its oil business. The stores are being offered for sale, with no set plan for new ownership.

Genmar Holdings, which manufactures 13 different boat brands, filed for bankruptcy thanks to the credit crisis. As recently as last month the company had no expectations of a bankruptcy filing. Genmar's boat brands include popular lines such as Triumph, Windsor and Ranger.

Hendricks Furniture filed for Chapter 11 bankruptcy today, citing economic conditions. The company's rapid expansion into Drexel and Thomasville stores created cash flow issues exacerbated by the financial crisis. The company's restructuring plan is already underway.

Apparel retailer Talbots is selling the J. Jill line to a capital investment firm. Seventy-five of J. Jill's 279 stores will close as a result of the sale. Talbots is positioning the move as a brand focus maneuver for the parent company, but the brand was sold at a "huge loss," according to the Wall Street Journal, and does not help Talbots' difficult financial situation.

The Filene's Basement discount chain has been purchased by Men's Wearhouse, the men's clothier. Men's Wearhouse outbid two other companies, including fellow discount retailer Syms. The buyer is expected to retain roughly 20 of Filene's Basement's 25 existing stores, shutting a few suburban locations.

Filene's Basement has had an interesting run in the past year, from closing a third of its stores to selling itself to a liquidation firm shortly before filing for bankruptcy in May.

Procter & Gamble has decided to cease United States distribution of the storied Max Factor makeup line. Max Factor, which began in 1909, is a billion-dollar line but gets a majority of revenue from international sales. The company was founded in 1909 by a Russian immigrant who coined the word "makeup" and is credited with helping popularize its daily use.

Apparel retailer Oilily filed for bankruptcy, the latest victim of the economic crisis. The 33-store retailer sells women's and children's clothing in mall locations. Oilily was recently acquired; it previously declared bankruptcy in Europe and closed all European locations.The company has also closed 8 U.S. locations in recent months.

General Motors, once the largest automaker in the world, is filing for bankruptcy Monday morning, the latest step in a long process to try and save some of the company. GM, which has taken billions of dollars in government assistance, is expected to need another $30 billion to complete its reorganization.

The bankruptcy process, which should be complete over the summer, will result in the General's closing or selling many of the brands in its stable. Pontiac is following Oldsmobile into automotive history; Hummer is rumored to be near a sale, and in Europe, Opel was recently sold, with Canada's Magna taking the largest stake.

GM's filing comes barely a month after Chrysler announced its own bankruptcy. Chrysler, like GM, received government bailout funds ahead of its bankruptcy filing.

Op-ed: This author, while generally supportive of domestic manufacturing, has publicly endorsed GM and Chrysler's bankruptcies, and hopes Detroit's once-big three will be able to continue a proud American tradition.