Five Months After Aggressive Growth Goals Stated, Ink Retailer Closes All Stores; Chapter 7 Filing Follows
In Chapter 7, InkStop Retail Chain to Liquidate, published 11/15/09
Warrensville Heights, OH-based printer ink and toner chain, InkStop, abruptly closed all of its 152 stores on October 1, 2009. At the time, the company said the closures were temporary, giving the company time to restructure and focus on its cash flow problems.
Unfortunately, the company's efforts have resulted in a Chapter 7 bankruptcy filing. InkStop will not be re-opening stores and instead will liquidate all of its assets. Reportedly, the company owes more than $48 million to about 1,000 creditors, plus $1.1 million in wages and benefits to laid off employees the company's CEO and co-founder. Additionally, InkStop is the subject of numerous lawsuits and legal complaints, including 95 evictions.
This latest action by InkStop is in stark contrast to an April 2009 Crain's article. At that time, company co-founder, Dirk Kettlewell said that InkStop was benefiting from "not being involved in the banking thing," as its growth was fueled by more than $80 million in private equity funding from 150 investors worldwide that expected InkStop to grow into a large chain of 2,000 to 3,000 stores. According to Crain's, Kettlewell said he expected InkStop to become profitable later in 2009 "for the first time ever."
According to CoStar Tenant, the average InkStop is about 1,500 square feet.
Original Story Published 10/2/2009:
Warrensville Heights, OH-based printer ink and toner chain, InkStop, sent a letter to its employees last week that read, "The company has elected to temporarily close all stores at the close of business today, October 1, to focus on a restructuring plan... All employees are laid off until further notice." The company cited cash flow problem among its key issues.
After closing six stores early this year, the chain reported in an April Crain's article that it had 155 stores in 14 states from Ohio to Texas, which according to various reports, was down to 152 stores by the time the Oct. 1 closure letter was issued.
The latest action by this ink retailer is in stark contrast to the April Crain's article. At that time, company co-founder, Dirk Kettlewell said that InkStop was benefiting from "not being involved in the banking thing," as its growth was fueled by more than $80 million in private equity funding from 150 investors worldwide that expected InkStop to grow into a large chain of 2,000 to 3,000 stores. According to Crain's, Kettlewell said he expected InkStop to become profitable later in 2009 for the first time ever.
According to CoStar Tenant, the average InkStop is about 1,500 square feet.
This article appears in CoStar's Retail News Roundup: Oct. 4 to 10, 2009
This week in the Retail Roundup, CoStar reports on
expansions or new concepts at Walgreens and Muscle Maker Grill;
closings, cutbacks, defaults, or bankruptcy news at Game Crazy, InkStop and Audit Integrity;
acquisition, merger, loan, sale, or IPO activity at Macerich and Heitman, Glimcher and Merlone Geier, and Getty Realty;
new retail development news in MS and WI;
personnel or corporate announcements at Cole Real Estate and Cedar Shopping Centers;
sustainability and green building news at Vitamin Shoppe and Darden Restaurants; and more.