I'm sure many of you have wondered around the mall and seen a Brookstone. It is the store that seems to have all those "unnecessary" gadgets, that seem very necessary when you are in the store. Really all I can recall that Brookstone even sells is massage chairs, maybe the occasional back massager, foot massager or book light made its way in too.
Brookstone has been losing business even since the 2008 recession. Their profits have not been the same and the store has been steadily declining. There are a few options as of yet: another corporation buying Brookstone, another corporation investing in Brookstone, or bankruptcy.
The company currently has $140 million in debt, and last month missed an interest payment. The chain seems to be draining all its assets and quickly at that. In Sept 2013, the company had only $1 million in cash. This is a huge drop from the $36 million in cash it had in Sept 2012.
The store seems to be trying to keep a float. They just recently hired an investment banker, a law firm, and financial advisers to see them through this time. Filing Chapter 11 would help them "refinance and/or restructuring its bond and other debt, and improving its capital structure".
It is certainly a rough road ahead. Its biggest competitor, Sharper Image, filed Chapter 11 in 2008. Without the major competitor, what is causing Brookstone's sales to plummet? My guess would be the novelty of the store and the surge of online shopping. Anything that can be found at Brookstore, is typically not an item you go looking for. But an item you see in the window and can't live without. With people trying not to spend, unless you have to-- it must be hard for the store to get customers. Add that with online shopping providers such as Amazon, if you "really need" that book light, you can jump online in the comfort of your own home, buy it, and it will be delivered in 2 days.
How do novelty shops stay in business? Will Amazon and other online sites kill novelty shops?
http://online.wsj.com/news/articles/SB10001424052702304434104579380971889707170
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