Brick and Mortar Stores Struggling To Compete With Online Market

June 26 2019| News| | By Okin Adams

For those involved in the retail industry, talk of bankruptcy has been fairly prevalent in recent months. In fact, according to Coresight Research, in 2019 alone at least seven major retailers have filed for chapter 11 bankruptcy protection. While the impacts of and reasoning for these filings often vary, the struggle for many brick and mortar storefronts to compete with online competitors is apparent.

Mattress One recently made the decision to file for chapter 11 protection. The company estimated its assets as ranging in value between $1 million and $10 million, with estimated liabilities in the same range. The 20 largest creditors listed in Mattress One’s filing were owed more than $8.7 million, with twelve of those creditors being in the Houston area.

Mattress One is not the only mattress retailer to file for bankruptcy protection. Just last year, Mattress Firm filed for chapter 11 protection, but managed to exit the filing nearly one month later, closing 700 of its stores just before the holiday season. Mattress Firm reported assets totaling nearly $3.35 billion and total liabilities of more than $4.39 billion.

With brick and mortar storefronts seemingly closing overnight, many wonder if the rise of online shopping caused this trend. Just last year, Amazon brought in $141.92 billion, excluding revenues from its service arms and marketplace commissions. Many retailers that have failed to keep up with changing retail trends have ultimately suffered.

The struggle for many retailers to stay relevant is not the only issue putting pressure on their ability to keep their doors open. Many have unpaid debts. Toys-R-Us, Bon-Ton, and dozens of others have been hit with compounding debt as the result of leveraged buyouts by private equity firms, and the obligations have ultimately left them unable to invest in e-commerce or store improvements to keep up with competitors.

While the outcome of Mattress One’s bankruptcy filing is unknown at this time, it is clear that for many retailers the struggle to survive is all too prevalent.

Houston, Texas Bankruptcy Attorneys

Okin Adams is a Texas law firm assisting businesses of all sizes with their legal, financial, and strategic challenges. We have represented creditors, debtors, committees, and trustees in a variety of bankruptcy- and litigation-related matters and understand the unique issues and procedures that can impact a bankruptcy case.

We bring an effective and efficient blend of big-law bankruptcy and commercial litigation experience to the table, but handle matters with the personal touch and adaptability of a boutique. We also embrace legal technologies that allow us to scale our representations as needed and handle large volumes of data and other client materials. We employ complementary technologies in the courtroom, with the ability to navigate and display evidence in a digital presentation that maintains pace and effectiveness with witness examinations and oral arguments. Put simply, our goal in each case is to outmatch our opponent and obtain the best result possible for the client.