It appears that many mid-size retail companies are facing pressing challenges from online marketing platforms that have eaten into their revenue streams in recent years. One of the latest retail apparel chains to register a crisis is Joyce Leslie, with its 47 stores, including some in Pennsylvania. The company, which caters to younger women aged 15 to 35, filed a Chapter 11 bankruptcy recently on the heels of a sharp decline in revenue.
The company announced that if it does not attract a buyer in the next several weeks, it intends to go into early liquidation sales of its inventory and property. It listed assets of $7 million and liabilities of $9 million. The company’s revenue has fallen from $104 million in the fiscal year for 2012 down to $63 million in 2015.
The company hired an investment banker in 2015 to find a buyer, but there has been no success. The bankruptcy filing states that “the lack of a sophisticated e-commerce platform” contributed to the company’s economic decline. The company also hired a new CEO with modern marketing experience, but that effort was to no avail.
According to some experts, the whole retail apparel market is trending down in an unsettled and quickly changing environment. There has been a decline in business at malls, a rapid growth of e-commerce, and a movement into the market of “fast fashion” retailers who offer less expensive prices and introduce new styles more rapidly. The problem has affected junior apparel retailers and has resulted in thousands of such stores being closed nationally.
The company is apparently not proposing a sweeping new marketing plan or reorganization of its operations in order to remain a going concern. It appears to be focusing on either a sale to a new buyer or liquidation. In some bankruptcies, market trends may combine with internal factors to demand liquidation instead of reorganization. The fate of the Joyce Leslie stores in Pennsylvania will be determined by the developments that come out of the current bankruptcy proceedings.
Source: northjersey.com, “Moonachie-based Joyce Leslie files for bankruptcy”, Hugh R. Morley, Jan. 13, 2016