David Wertheimer: September 2009 Archives

Saturn, the beleaguered General Motors import-fighting marque, will be winding down operations after a proposed sale collapsed Wednesday.

GM had planned to sell Saturn to Penske Automotive Group, the company behind successful trucking and auto-racing businesses. Under the agreement, Roger Penske's company would have become a retail seller of cars eventually manufactured by another company. But the manufacturer (rumored to be Renault SA) rejected the deal. Without a manufacturing agreement, Penske was unwilling to complete its purchase.

Saturn's operations instead will be wound down by GM, which has yet to set a timetable for the brand's closing. Saturn currently has 350 dealers across the United States.

This one's not recession related, but it is interesting: Jolt Cola filed for bankruptcy protection after experiencing problems sourcing new packaging. Jolt ordered 90 million "23.5 ounce resealable cans" from a supplier but has received just 30 percent of its order. The lack of supply forced Jolt to make alternate accommodations, and the resulting moves created a capital crunch that the company doubts it can fix.

No word yet on whether this will have any impact on Jolt's operations, although the lack of packaging would suggest Jolt becomes harder to find in the coming months.

Joystiq is reporting video game retailer Game Crazy is closing 200 of its 680 stores. Game Crazy, a unit of Hollywood Entertainment and Movie Gallery Inc. (which also owns Hollywood Video), is citing the economy as the culprit. Specific store closings have not yet been identified.

Beleaguered jewelry retailer Finlay Enterprises has decided to close all its specialty stores, including Bailey Banks & Biddle, Carlyle & Co. and other outlets. Finlay, which has endured a restructuring and a bankruptcy filing this year, will apparently be out of the retail jewelry business after store-closing sales are complete.

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 numerous local stores with long histories:

• In Ogdensburg, N.Y., 99-year-old Hulett & Sons Jewelers is closing up shop. The jeweler, which is part of the larger Hacketts store, is selling its inventory to help Hacketts stay afloat. Hulett & Sons first opened in town in 1910.
• Alma, Michigan's Miller's men's shop is folding after 47 years in business. Owner Duane Stacey blames clothing trends and shifting shopping habits as driving forces of the closure.
  
• And legendary Memphis music store Pop Tunes closed both locations this month. Pop Tunes dates to 1946 and was not shy to discuss its demise, noting the "rampant illegal downloading ... low margins, big box retailers" and other factors as factors in the closings.

A pair of high-profile Manhattan dining institutions filed for bankruptcy in recent days. Café des Artistes, an Upper West Side classic, made its filing this week after closing its doors last month. The restaurant had been open since 1917 and is well known for its murals and protracted meals.

A few blocks away, Tavern on the Green filed for bankruptcy as well, although its current owner promises to continue operations until the end of the year. Unlike Café des Artistes, which has closed for good, Tavern's operating license has been sold to another operator, who takes over in 2010.

The pair are the latest casualties in a difficult year for restaurants; several notable high-end eateries, including La Goulue and Payard, closed in recent months. The Bloomberg article linked above notes New York's restaurant industry, an integral part of its social and economic infrastructure, has declined 11 percent this year.

The retail unit of Samsonite Luggage filed for Chapter 11 bankruptcy last week, with plans to rapidly close 84 stores. The move is designed to increase profitability by halving the number of existing retail outlets. Merchandise is to be liquidated this fall.

Samsonite expects no disruption of business beyond the proceedings and store closings. The company blamed the recession's impact on travel as the main driver of the bankruptcy filing.