The effects of low consumer spending have hit several retail businesses hard. People are seemingly visiting malls less, as hard economic times lead to more cautious spending. In this type of climate, consumers and businesses are all dealing with financial strain, and many people are considering filing for bankruptcy.
The women’s apparel retailer, Love Culture Inc., is the latest company to be susceptible to such circumstances. The company, which has over 80 stores across several states filed for Chapter 11 bankruptcy recently. They stated in a petition filed in a U.S. bankruptcy court in New Jersey that they have $50 million in assets and liabilities.
Founded in 2007, the company’s primary market was young women aged between 18 and 35 years. The business expanded to include an online store and an upscale brand in 2012, but costs of improving technology and expanding online strained the apparel retailer’s resources. It was unable to deliver services to its consumers effectively as a result, according to its chief restructuring officer.
That same individual also stated that the sales of the business had consistently fallen below projections, which in turn resulted in suppliers demanding faster payment. The company had trouble obtaining credit. All these issues have translated to serious financial challenges for the clothing business causing it to look for debt relief.
Now the company is seeking to close stores that are running losses as part of business reorganization. It also intends to restructure its debt and to look into the possibility of selling all of its assets as a going concern.
This is just one example of one resolution to mounting debt and financial troubles. Every situation is unique, however. Determining what the best route to relief may be can be overwhelming; however, with the help of an attorney people can tackle debt and get back on track.
Source: Reuters, “UPDATE 1-Clothing chain Love Culture files bankruptcy, may be sold,” Jonathan Stempel, July 17, 2014