Parent Company, the online toy retailer and, er, parent company of eToys and other stores, became the first notable holiday season retail casualty when it filed for Chapter 11 bankruptcy Monday. The company, which has had numerous ups and downs since the end of the dot-com boom, called the filing "unfortunate but necessary."
chapter 11: December 2008 Archives
Flying J cited a cash shortage in a Chapter 11 filing Monday, brought on by the steep decline in oil prices and tight credit markets. Flying J, which has 250 service and travel stations nationwide, is one of America's largest privately held companies. The company plans no change in operations during the reorganization.
Op: One would think that declining oil prices would not have a material effect on a service station--indeed, the lay person figures it could help, not hurt, margins, since the stations could lower prices more slowly than the futures market. But if Flying J secured its oil at too high a price, and competitors with better buying can lower prices faster, this wipes out profitability.
Interesting corollary impact to the economy: Albany's largest dry cleaner has experienced a "dramatic downturn" in revenue and has filed for bankruptcy. "We're seeing clothes dirtier than they used to be," said CEO B. Robert Joel. Rising energy costs coupled with declining consumer traffic combined to create a significant shift in the business. Four of the chain's 14 locations will be closed.
Paige Restaurant Group filed for Chapter 11 bankruptcy this week to escape its leases. The filing was done to get the restaurant Honey out of its space in the Meatpacking district. The group, which also owns The Hill, Dune Southampton and The Event Space, is reporting otherwise steady business.
Industrial news, but two in one day four this week: Kongsberg Automotive is closing a plant in Ohio and Special Devices filed for bankruptcy. Special Devices, which makes a variety of technical components, cited the downturn in automobile sales; Kongsberg is restructuring.
Update: there were more of these than previously noted. Auto supplier Precision Parts International, which makes metal componentry, filed for Chapter 11 bankruptcy and is planning liquidation; and plastic parts maker Key Plastics also filed for Chapter 11, but plans to reorganize.
A moment of editorializing: if the market were able to signal for or against an auto industry bailout, these manufacturers are a sure sign in favor of one. The United States has hundreds of companies like the ones above who may fall in a real-world domino effect should America's car companies file for bankruptcy and wipe their credit slates clean. This author had not been in favor of industry aid, but posts like this give pause.
Regional auto rental company Advantage Rent A Car filed for Chapter 11 bankruptcy protection and is closing around 70 percent of its locations. The company, which once had 140 locations and 24,000 cars across 12 states, will be down to ten locations following the restructuting. Advantage is also drastically reducing staff at its headquarters.
Toy retailer KB Toys filed for bankruptcy today, citing a "sudden and sharp decline" in sales. The liquidity crisis is specifically cited as a factor in the filing. The company, which has been around since the the 1920s, also went bankrupt in 2005.
Update: as part of the filing KB is specifically planning on closing all its stores.
The 58-year-old Baltimore Opera filed for Chapter 11 bankruptcy Monday and canceled its entire season. The opera, which has been struggling, also canceled contracts for three productions in next season's plans. The company faced a cash shortage and emergency financing guarantees in the weeks leading up to the bankruptcy filing.
Flooring product retailer iFloor filed for Chapter 11 bankruptcy and trimmed staff by 60 percent. The company, which operated 35 stores in addition to an ecommerce presence, fell short in fundraising efforts. iFloor is selling existing inventory and assessing whether the company can continue to operate.
Women's clothing retailer B. Moss joined the list of Chapter 11 retailers with a filing Tuesday. The company, nearly 70 years old, has stores in 19 states. B. Moss hopes to begin going-out-of-business sales this weekend and close most of its 70 stores by the end of the year. A potential sale fell through earlier in the year.
Bally Total Fitness filed for bankruptcy today with more than $1 billion in debt and more than 100,000 creditors. The high debt made financial maneuvers difficult in today's economic climate. This is the second bankruptcy for Bally in 14 months. The filing does not address fitness center operations.
Poultry producer Pilgrim's Pride filed for Chapter 11 bankruptcy today in a move widely expected by financial analysts. Pilgrim's Pride has suffered a double-whammy of increased costs (for feed) and reduced demand from restaurants, which has thrown off the company's supply curve.
Pilgrim's Pride has already secured temporary financing and plans to continue operations while restructuring.
