Is Bankruptcy the New Normal for MULO Brands? Street Fight

Is Bankruptcy the New Normal for MULO Brands?

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Over the past year, we’ve featured many articles about multi-location (MULO) brands that declared bankruptcy (BUSTs).

But we’ve also seen brands emerge from bankruptcy, become part of other companies (like Bed Bath & Beyond and Overstock), and/or change their business model to be online-only (as Lord & Taylor did with its iconic brand).

Some other companies manage to rise from the dead only to suffer a second (perhaps even more painful) downward spiral. Boston Market’s history is one such example.

Repeat filings are also on the upswing. Rue21 just went bankrupt for the third time and closed all its stores.

Bankruptcies themselves are nothing new. What’s different today is that they play out very publicly, and the stories may read like business soap operas, with raving brand fans perplexed, angry, and sometimes vocal on social media.

However, MULO brand leaders seem to have become quite adept at explaining why the companies they manage are unraveling and running into huge debt. The most common explanations (often announced through flowery press statements or heartfelt LinkedIn announcements) are:

  1. Management missteps: Throwing a leader under the bus always seems to an easy out.
  2. Overly ambitious investment and growth: This one really can’t be separated from #1. MULO brands don’t scale themselves. Someone had to have decided to open new locations or invest in flopped product spin-offs or technologies.
  3. Cost of goods, labor, and rent: This one is hard to refute. It’s a reality.
  4. Transforming consumer tastes and demographics: Also a reality, this can often be preempted by early research investments and fast decision-making. But again, see #1. Leaders who refuse to listen to the warning signs or spend time infighting rather than changing direction may be doomed to fail.

But, as much as we may secretly enjoy watching some businesses crash and burn, everyone adores a good comeback story. Here are 18 of them. Although not all MULO brands, some of them, including Apple, Marvel, and Best Buy, are names we all know and love.

In short, the word “bankruptcy” may no longer equate with failure. It may simply mean that management is finally deciding to take positive (and sometimes creative) action to stem the blood flow. Bankruptcy can result in creative new partnerships and business models, fewer brick-and-mortar locations in the “right” areas, different footprints and product offerings, or online-only opportunities.

And, as for those companies filing for the second (or even third) time…we hope they’ve learned a little something along the way!



Nancy A Shenker, senior editor with Street Fight, is a former big brand (Citibank, Mastercard, Reed Exhibitions) marketing strategist and leader. She has been featured in, the New York Times and Forbes.
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