Technology and furniture retailer Brookstone announced on Thursday that it will file for Chapter 11 bankruptcy.
The company reported that it will close all of its mall stores but will keep its airport locations. Brookstone is still looking for a buyer and has received a $30 million loan to operate while it waits. It reported that it has roughly $500 million in liabilities with a maximum of just $100 million in assets.
The filling stems from the rapid decline of mall visitors, according to the company. Indeed, mall occupancy reached its lowest point in six years last quarter. The company explains, “We believe our strength is identifying, developing and selling products that are functional in purpose, distinctive in quality and design and not widely available from other retailers.”
Another problem with the company was their value proposition. Brookstone based itself off of quirky, unique gadgets that consumers could pick up in a store, try out, and purchase without even knowing they wanted it. However, while this set them apart initially, it became challenging to sustain. As competitors entered, they struggled with inventing and selling new ideas that consumers could actually use.
Plus, Amazon also contributed to their decline. Online shoppers generally used Amazon for their technology purchases, as the e-commerce giant offers cheaper and more useful options than Brookstone. Generally, Brookstone shoppers go into the store to explore and try out goods, but that’s not possible online, which eventually damaged their sales.
The company already filed for bankruptcy in 2014 before a Chinese company bought them for $136 million, so hope is not lost for the company. However, they will need to make changes to their value proposition if they hope to turn their company around and beat out competitors like Amazon.