After experiencing their third bankruptcy in ten years, Filene's Basement and Syms have decided to liquidate their stores nationwide.
"The filings today are the result of a process that has been taking place for several months," Syms said. "Our board has conducted a rigorous assessment of all the strategic options and alternatives available and after careful consideration has come to the conclusion that a bankruptcy filing and liquidation is the best way of maximizing value for all stakeholders."
When Syms purchased Filene's Basement during their 2009 Chapter 11 bankruptcy, they promised to restore the company to its previous glory; but the retailer has been unable to become financially viable. With the unemployment high and consumer confidence low, their post-bankruptcy success has been hard coming. But other firms such as GM, were able to adapt after bankruptcy, so what went wrong? First of all, three bankruptcy filings in only ten years is very unusual. It hints at either management problems or the inability to adapt to market conditions. Sometimes a bankruptcy debtor can fail to adapt, leaving them little better off after they exit Chapter 11 bankruptcy.
If they want to fully benefit from their Chapter 11 bankruptcy, they must be prepared to face the reality of their industry's environment. And some industries simply aren't doing well, namely the retail industry. Because adapting to a changed industry after bankruptcy could mean closing a few stores or complete retooling a business model, some companies simply are unable to do what it takes to adapt. Those firms are better off liquidating in Chapter 7 bankruptcy .