Posh Tots, the purveyor of some of the most extravagant baby and child gear we've seen, is in financial trouble. Posh Tots is a subsidiary of the Parent Co., a Denver-based online retailer of products for children and babies which filed for bankruptcy protection recently. The company listed assets of $20.6 million and debt of $35.7 million in Chapter 11 documents filed in U.S. Bankruptcy Court in Wilmington, Delaware. The reason for the problem, that old bugbear, lack of sales. Bloomberg reports that net sales were about $20 million in the first half of fiscal 2008, compared with about $106 million for all of the previous year. Parent Company had about 946 employees at the beginning of December and now has just 103 people people. Other subsidiaries in the filing include Etoys Direct, BabyUniverse, Dreamtime Baby, Gift Acquisition and My Twinn. The company plans to sell its assets at auction.
Mall favorite children's store KB Toys filed for bankruptcy protection two weeks before Christmas, 2008, and will be closing their stores.
Prefab home builder Empyrean International, the builder of Deck Houses, Acorn Homes, and Dwell homes is the latest victim of the credit crunch. The Massachusetts-based company closed in late October and two weeks ago, a court-ordered receiver took control of the company. The owner of Empyrean, Patrick Gilrane, blames the failure of Lehman Brothers as well as the weakening economy for the closure. He had hoped to restructure and reopen the company next year but the home builder has defaulted on a $7 million loan and has not paid its utility bills or taxes for months. The Boston Globe reports that the receiver, attorney Stewart Grossman plans to put the company up for sale once he puts its affairs in order. The company's roots go back to 1947 with the founding of Acorn Structures. Deck Houses and Acorn homes have crated entire neighborhoods. Over the last few years Empyrean has worked with Dwell magazine to create boxy modernist homes. Dwell plans to continue working on prefab homes with a different builder.
The latest luxury company to hit trouble is Waterford Wedgwood. The Dublin-based company announced on Monday that 10 British units and four businesses in Ireland have been placed into administration after running out of money and failing to find a buyer. The NY Times reports that the other subsidiaries in the U.S., Germany, Canada and elsewhere are not affected. The company has been in talks with lenders for months while a suitable buyer was sought. After takeover talks failed on Friday a group of lenders decided to suspend a covenant that is part of Waterford's loan agreement. Waterford is famous for their crystal and for making the ball that drops each New Year's Eve in Times Square. Waterford Wedgwood was created in 1986 when the Irish crystal maker Waterford acquired the British ceramics company Wedgwood. Wedgwood was founded in 1759 by Josiah Wedgwood and Waterford was founded in 1783 by the brothers William and George Penrose. Sales for the year ending in April 2008 were down 9.4 percent from a year earlier and the company posted a loss of 231 million euros, up from 71 million euros.
The home goods store Linens N Things is going out of business and is still in the process of closing their stores.
Circuit City filed for bankruptcy protection in November, 2008.
Mervyn's is going out of business and has been liquidating their stores and assets.
Six months ago, 16-year-old Russian fashion designer Kira Plastinina was having her U.S. launch party. Her pink-festooned stores opened in New York and Los Angeles and she appeared on MTV's TRL. Fast forward to now, TRL is no more and Kira Plastinina is closing almost all of her 12 U.S. outlets after being open less than a year. Sergei Plastinin, Kira's rich father, tells Bloomberg that the numbers of shoppers in the U.S. fell significantly and because of the banking crisis it also become much harder to get money for growing the chain. The U.S. backing company has filed for bankruptcy.
The Sharper Image filed for bankruptcy in February, 2008, and is continuing to close down stores and sell off assets.
Discount clothing chain Steve & Barry's filed for Chapter 11 bankruptcy protection in July, 2008, and later decided to liquidate their stores.
According to another SBJ report, the NBA expects gate receipts to stagnate, while sponsorships for events, venues, publications and team-related products have become a very tough sell. The players are also suffering, with many endorsement contracts bringing in half of what they did during the recent boom times.
Overall sponsorships for the league are also up for renewal, and only a Hail Mary bucket could help it avoid a sharp decline in the revenue from these rights.
The NBA is not alone in this decline. All pro sports, from the NFL to NASCAR, are struggling to find replacement sponsors for companies that can no longer afford the cost and the perception of fiscal irresponsibility of sports sponsorships. Minor sports such as arena football have already canceled entire seasons, and I expect that before the economic crisis is over, we'll see some pro teams in the three major sports on life support.