Clothier Mark Shale, based in Chicago, Ill. is one of the city's oldest specialty retail stores. The retailer filed for Chapter 11 bankruptcy protection this week as it continues to seek a buyer or additional financing to continue staying afloat. The retailer, which is over 80 years old, claims sales have dropped significantly in recent years by 60 percent. A reduced cash flow and the downturn of the economy are to blame for the filing.
In its recent fiscal year the retailer indicated sales totaling just over $6 million, yet a reduced cash flow has put a strain on efforts to fulfill orders for merchandise. Court documents related to the filing state that the retailer has limited options as far as how they can market their brand and gain capital. A legal representative for the retailer claims its possible Mark Shale may gain value by selling other inventory such as furniture and equipment.
The Chapter 11 bankruptcy filing is the retailers' third time seeking protection. The retailer has sought buyers from various national liquidators but has been unsuccessful. The retailer is hoping to roll out a clearance sale in the fall at 3 locations in and around the Chicago area, pending approval from the court. Mark Shale will have assistance from Gordon Brothers Group from Boston, in carrying out the clearance sale.
The retailer's fashion designer Maria Pinto left the company within the last year. She is known for creating designs for Michelle Obama and Oprah Winfrey. In 2009, the retailer filed bankruptcy and received close to $4 million from a private equity group to pay toward debt. The retailer also filed for protection in 1995. Mark Shale currently has 98 employees with about $3 million in assets and almost $6 million in liabilities.