PROCOPIO: Next labor & employment law seminar topic: paid sick leave.
SURFRIDER: Ocean-friendly gardening and water conservation.
Details on Industry Insight.
Retailer Metropark filed for bankruptcy this week, another stunning example of the dramatic change in fortunes wrought by the recession.
Metropark really hit its stride during the go-go times of 2007 and 2008, and was often cited for creating an exciting in-store environment with live DJs and art installations.
It appears, however, that a lot of its 25 to 35 year old shoppers were relying on credit cards to pay for all that premium denim.
The company filed to go public in 2008. In those documents, Metropark said its same store sales in 2007 rose 34.2%, and in 2006, same stores sales increased 18.3%.
In 2008, Metropark’s peak, sales for the year totaled $123 million.
However, when the economy tanked so did Metropark’s business, and it later withdrew its application to be publicly traded.
In 2009, sales fell 15.4% to $104 million. Sales in 2010 were flat to 2009.
Metropark’s operating loss in 2010 was $16.4 million, according to bankruptcy documents.
The company blames its downturn on the high unemployment rate for consumers in their 20s, restricted credit card availability and the move to value pricing, fast fashion and a glut of premium denim.
As its business declined, Metropark’s own lenders restricted its access to credit. The severe liquidity restraints led the company to not pay rent to some landlords in March and April of this year, and limited its ability to get new inventory from vendors.
The company has thus far not been able to find a financial partner to give Metropark a cash infusion, and is prepared to start going out of business sales as soon as Friday, it said in court documents.
It owes vendors approximately $8.8 million. A sampling of some familiar names on the list of 30 largest unsecure creditors, their rank on the list and amount owed to them include:
1. True Religion - $629,334
4. Scotch & Soda - $253,915
6. Obey - $211,891
7. G-Star - $205,831
10. Crooks & Castles - $162,337
15. Diesel - $114,450
It also has several secured claims, including $2.5 million it owes to Wells Fargo.