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Brookstone Plans to Close All 101 Mall Stores Amid Filing for Chapter 11 Bankruptcy Protection

Chain Seeks Buyer for 35 Airport Stores, E-Commerce Business
August 2, 2018
Brookstone will close 101 mall-based stores, including its store in the Beverly Center in Los Angeles, CA.


Brookstone Co. Inc. filed for Chapter 11 bankruptcy protection and said it will close all 101 of its stores in malls across the country. It's also seeking a buyer for its still-operating 35 stores located in airports as well as its e-commerce business.

The Merrimack, NH-based retailer, which sells unique products including massage chairs, tech gadgets, specially designed luggage and fitness items, cited "an extremely challenging retail environment at malls" in a statement released Thursday.

Chief Executive Piau Phang Foo said Brookstone’s airport, e-commerce and wholesale business divisions were "operating successfully."

Many Brookstone stores are in lower-performing, Class B and Class C malls, according to CoStar research. CoStar data shows the vacancy rate in Class C malls, a category it defines as generating average sales of less than $350 per square foot, at 8.8 percent.

Several other retailers have declared bankruptcy this year, including department store Bon-Ton and shoe purveyors The Walking Co. and The Rockport Group, which shut its 60 stores last month. In addition, several mall-based department stores announced store closings this year, including Sears and Kmart, which have shut 284 stores, and Foot Locker, which closed 110 stores, according to Coresight Research.

"I’ve always loved the Brookstone store. It’s really disappointing to see another retailer succumbing to the challenges in the retail marketplace," said Brad Umansky, president of retail brokerage Progressive Real Estate Partners in Southern California, adding that the chain's own website is a competitor to its mall stores. "The reality is you can get pretty much anything they sell online."

Brookstone, which was founded in 1965, entered into an agreement with Wells Fargo Bank and Gordon Brothers Finance Co. for $30 million to facilitate the sale of the properties, according to the bankruptcy filing. The business reports assets of $50 million to $100 million, but liabilities between $100 million and $500 million.

The company, which filed the petition in the Bankruptcy Court for the District of Delaware, had previously filed for bankruptcy in 2014 and was sold to investors in China.



Rob Smith, National Retail Reporter  CoStar Group   
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