According to an article in Bloomberg, Samsonite Co. Stores, the retail division of the luggage-maker Samsonite Corp., filed for Chapter 11 bankruptcy protection.
The article said:
"The recession has caused a severe decline in consumers purchasing travel-related goods and the company has responded to this critical situation with a substantial restructuring program," Kyle Gendreau, chief financial officer of Samsonite Corp., said in a statement."
The bankruptcy court papers revealed that the Samsonite Co. Stores have $233 million in assets and $1.5 million in debts. The retailer has 173 stores nationwide and employs 650 people. Store closings are expected; but details of how many stores will be closed and was not reported.
The Samsonite Co. Stores bankruptcy filing is another fear realized by many in the retail industry. Many retailers are unable to sustain the prolonged losses caused by declining sales and many creditors, especially unsecured creditors are afraid that if a company files bankruptcy they will be unable to collect on the debt. Samsonite's 20 largest unsecured creditors are owed a total of $920, 301 according to the bankruptcy papers and it's likely they will collect very little of that money.