Bankruptcy can affect even businesses that seem as if they're doing well. Take, for example, the well-known shoe store chain, Payless ShoeSource. This store has been around since the 1950s, but after filing for bankruptcy the second time, it has decided to close its doors for good.
In 2017, the company closed 673 stores with its first bankruptcy. It was hoped that this would help the company stay afloat, but with competitors such as Zappos, Walmart, Target and Kohls, the store found itself irrelevant. The company also found itself in a high amount of debt due to expanding too quickly, which ultimately led to the company having to close its doors.
Others blame poor merchandise assortment and a lack of competitive offers for the end of Payless. This store isn't alone in its woes. Others, including Gymboree and Charlotte Russe, have also closed stores, mostly due to high debt and extreme competition.
If you run a business that is struggling in today's market, bankruptcy can be an option that allows you to remain open or to sell your stock and close your doors for good. Each business owner is going to have their own preferences and options, depending on your income stream. Your attorney can give you more information about entering into bankruptcy to protect your business, employees and bottom line. In best-case scenarios, a Chapter 11 bankruptcy can help you get your budget straight and work toward a profitable time in the future. Simple changes can sometimes make all the difference, especially when you proceed with caution in business.