Bachrach Menswear Stores Closing After Filing for Second Bankruptcy
The exit from bankruptcy didn’t last long for Bachrach men’s stores, which emerged from bankruptcy protection last August.
The company, based in Los Angeles but best known in the Midwest, announced it was shuttering all 14 of its stores located mostly at malls after filing for Chapter 11 protection on Feb. 16 in U.S. Bankruptcy Court in Los Angeles.
“Margins in the menswear sector have been shrinking due to declining foot traffic at malls, stiff competition from e-commerce retailers and significant shifts in consumer-spending patterns,” said Scott Carpenter, president of GA Retail Solutions. Liquidation sales are being conducted by Great American Group and Tiger Group.
At one time, the chain, founded in 1877 in Decatur, Ill., operated 32 stores, but as menswear tastes have shifted to more casual looks, the retailer’s footprint began to shrink. Currently, its stores are located in Texas, Virginia, New Jersey, Tennessee, Michigan, Wisconsin, Indiana and Illinois. Brian Lipman is Bachrach’s president and chief executive officer.
The company—which sells suits, dress shirts, tops, pants, shoes and accessories—said in court papers that the business was profitable until 2016, when its consumers started gravitating more toward online shopping. Even though Bachrach’s e-commerce sales grew from $1 million in 2015 to $1.2 million in 2016, that was far from enough to make up for a number of less-profitable stores based primarily in shopping malls.
From 2010 to 2015, the company was in the black, with gross sales growing from $11 million in 2010 to their peak of $18.8 million in 2014. Along with that revenue boost came 17 new stores in 2012, according to court documents.
This store-expansion plan was part of a package deal with mall owner Simon Properties Group, court papers said, which required that Bachrach lease certain retail space at Simon’s less-desirable Class C malls in order to get into better locations at some of Simon’s topnotch malls. Initially, this expansion plan worked well but eventually started to drag on revenues when the stores at Class C properties started underperforming.
After exiting bankruptcy, Bachrach said mall operators were willing to renegotiate some of its leases to help with the retailer’s bottom line, but apparently that wasn’t enough.
In the first bankruptcy, the company listed $11.3 million in assets and $12.4 million in liabilities. Bachrach’s biggest creditor was Israel Discount Bank of New York, which was owed $10.57 million. In its recent filing, Israel Discount Bank of New York is owed $1.2 million. Various Simon Properties Group malls are owed more than $3 million.