Business bankruptcies often contain clues to marketing trends. The rise of Amazon in the late 1990s, for example, was probably connected to the downfall of Circuit City and various other retailers.
Of course, bankruptcy filings often involve more than one factor. But industry trends are in many cases a key part of a commercial bankruptcy filing according to this Bethesda Maryland Small Business Attorney.
In this post, we will discuss that issue in the context of a recent bankruptcy filing by the Loehmann’s chain of retail stores.
The chain initially filed for Chapter 11 bankruptcy back in 1999. Since then, it has done so two other times, most recently in 2011.
Now, however, the company is in the process of liquidating its 39 stores across the nation.
How did a venerable chain, with roots dating back decades, finally succumb to red ink? After all, the company had survived many crises before, including the Great Recession.
It could be that, like many old-line department stores around the country, Loehmann’s lacked sufficient specialization in its targeted retailing niche.
After all, there is more and more pressure these days to offer customer-focused experiences that showcase particular brands and seek to create value-added experiences.
The Apple stores are often cited as examples of this type of retailing experience that others seek to emulate.
Of course, the overall economy and competition from competitors are other factors that can affect bankruptcy filings. Our point is simply that, to the close observer, there may also be clues in bankruptcy filings to where the trends in a given industry are going.
Source: Upstart Business Journal, “Lessons from Loehman’s liquidation,” Teresa Novellino, Jan. 27, 2014