Cosi, the Boston-based sandwich chain renowned for its flatbread sandwiches, filed for bankruptcy in a Boston courtroom.
According to Forbes, Cosi hopes to restructure its debt and explore a possible sale after poorly planned overexpansion and menu revamps left the company in debt. Cosi operated 74 company-owned restaurants and 31 franchised restaurants in 15 states at the time of filing.
Cosi now plans to close 29 of its underperforming company-owned stores and has secured $4 million in debtor in possession financing from a string of investors who want to buy the chain out of bankruptcy. The company also fired CEO R.J. Dourney and other executives in August.
“We worked very hard to avoid this step,” Mark Demilio, Cosi’s chairman, told Forbes. “The company cannot continue to operate in its current financial condition, and that the best alternative for the company and its creditors would be to accomplish a sale through the bankruptcy process.”
Could the bankruptcy of Hanjin Shipping Co., the world’s seventh-largest shipping company, which has roiled the global shipping network, actually prove to be a boon for the global shipping trade?
That’s what a Reuters report seems to indicate, as more and more global shipping companies are beginning to wake up to the potential of increasing technology — things like sensor-laden containers, smart ships and using data to figure out real-time shipping rates — to streamline the shipping process and make the shipping of international freight more cost-effective.
It’s an effort by many of the world’s largest shipping companies to try and avoid the fate that befell Hanjin, the South Korean shipping company that filed for bankruptcy in late August.
“This industry is broken; there’s no question we have a serious issue,” Jesper Kjaedegaard, partner at shipping and logistics firm Mercator International, said at a recent shipping conference in Singapore, according to Reuters. “Without technology, this industry is not going to move much further.”
Meanwhile, some of Hanjin’s sailors, who have been stranded on ships stuck in ports since the bankruptcy filing on Aug. 31, are being denied shore leave by U.S. immigration officials, according to multiple reports. U.S. customs officials claim that the crewmen are a threat to possibly jump ship due to the uncertainty of the company’s bankruptcy situation and when it might be resolved; sailors are stuck on Hanjin ships that have been impounded until a resolution can be reached to unload the goods they are carrying.
Hanjin operates a total of 97 container ships, 37 of which the company owns and another 60 that it charters out, according to The Wall Street Journal.
Will Sears be the next major retailer to file for bankruptcy? And how many more could follow after that?
A new report from Fitch Ratings cites a list of seven prominent retailers that could be “at risk” for a bankruptcy filing in the next year to 24 months, due to the “highly competitive” environment currently facing brick-and-mortar retail stores.
“Brand degradation and competitive pressures to either price or experience can be real threats to the survival of struggling retailers,” said Sharon Bonelli, senior director of leveraged finance at Fitch. “As a result, many retailers move into the bankruptcy process without a real reason to exist and ultimately end up in liquidation more often than bankrupt companies in other sectors.”
Those retailers who made Fitch’s list are: Sears Holdings Corp., Claire’s Stores, Inc., True Religion Apparel, Inc., 99 Cents Only Stores LLC, Nebraska Book Company, Inc., Nine West Holdings, Inc. and Rue21, Inc.
That’s an awful lot of retailers who are teetering on the brink of bankruptcy to watch out for in the coming months.
“The lack of proprietary products in many categories leaves retailers vulnerable to permanent traffic decline resulting from the rise of competitors (for example, discounters and online-only players),” according to the report. “The outcome in either case is that the bankrupt retailer has lost its place in the market and thus has limited value as a going concern.”
Fitch based its findings on a study of 30 recent retail bankruptcy cases involving a total of $10.5 billion in debt. The study found that half of those retailers didn’t survive the bankruptcy process, way up from the 17 percent of bankrupt companies in other industries that don’t manage to survive.