Brookstone, a specialty retailer known for massage chairs and gadgets, used to be a must-see mall retailer. But shopping malls aren’t nearly as busy as they once were, and, with declining foot traffic in U.S. malls, Brookstone is now the latest major brick-and-mortar retailer to announce that it has filed for bankruptcy protection.
With the bankruptcy, Brookstone is planning on shuttering 102 brick-and-mortar stores located in malls. But stores located in airports may face a different outcome: The retailer plans to sell those because they are faring well. In a statement, Brookstone CEO Piau Phang Foo said the company has undergone steps to restructure its business. “The decision to close our mall stores was difficult, but ultimately provides an opportunity to maintain our well-respected brand and award-winning products while operating with a smaller physical footprint,” he said.
Brookstone came on the scene in 1965, selling tools that were hard to find, and was the kind of place that shoppers would explore to new and quirky items. In Brookstone’s glory days, the retailer sold items such as Rock & Recline Shiatsu massage chairs and Nap weighted blankets. Beyond its brick-and-mortar stores, the company had a catalog business with a wide reach: The company sent out nearly 60 million catalogs in 2006.
In the 1990s, Brookstone went public, but in 2005, the company was taken private and sold to a consortium that included a retailer and a private equity firm. According to CNN Money, the situation then soured for Brookstone: The two groups of owners had different priorities and the company faced constant turnover in the C-suite. Less than 10 years later, a consortium from China purchased the company for $136 million in 2014.
At the same time, Brookstone and its competitors lost their luster, as they were no longer the only places where consumers could buy unique, high-tech products. But even with these challenges, Brookstone was able to outlive other specialty retailers such as The Sharper Image, which filed for bankruptcy protection and shut down operations in 2008, and SkyMall, which filed for bankruptcy in 2015. Both have operations online under new owners, reported The Wall Street Journal.
Aside from Brookstone, other brick-and-mortar stores are struggling and have announced closures this year: Bon-Ton Stores is going out of business, as retailers such as Sears are cutting back their physical footprints. As for Brookstone, the remainder of its assets will be sold in a bankruptcy-run auction, which the company hopes to complete by the end of September. In addition, the retailer is looking to sell its intellectual property, including its brand names and eCommerce business.
In Other Brick-And-Mortar News
Kroger is continuing its digital push with a new delivery service dubbed Kroger Ship that uses third-party carriers. The offering will debut in Houston, Louisville, Nashville and Kroger’s hometown of Cincinnati.
With the service, consumers can buy 4,500 private-label products from the retailer, which are not otherwise available online, along with 50,000 different grocery items and household products. The choices were informed by data from Kroger’s 84.51° customer insights division. As the service rolls out, Kroger is offering customers a discount with a one-time promo code.
McDonald’s is celebrating the 50th anniversary of the Big Mac by rolling out a MacCoin. The coins are available to customers who purchase a Big Mac at 14,000 restaurants in the U.S. Customers can redeem the burger currency for another Big Mac. Thursday (Aug. 2) was chosen as the launch date to roll out the coins, as it is 100th birthday of Jim Delligatti, the McDonald’s franchisee who created the Big Mac.
J.Crew has launched its first rewards program in a bid to lure back shoppers: The retailer’s new loyalty program offers standard perks such as a $5 store credit for each $200 spent, as well as free standard shipping to people who sign up for the program, which is open to all customers, regardless of how they pay.
The plan is the first major initiative led by President and Chief Experience Officer Adam Brotman, who was hired five months ago and serves as CEO James Brett’s second-in-command. Brotman joined J.Crew after the company announced in December that it will be relying on mostly online shopping channels to boost sales and reestablish itself with its customer base.