An Ontario-based discount clothing retail company, Susie’s Deals, filed for Chapter 11 bankruptcy protection in April 2011. The company has been closing stores, including stores in Anaheim, Fullerton, and Orange County – all in California.
“The debtor has closed unprofitable locations and will continue to analyze operations to potentially close additional locations which are not beneficial to the estate,” according to a bankruptcy court document.
The company started in 1974 when four siblings, Susie Hyman and her brothers, wanted to sell clothing for fashion enthusiasts on a budget. They sold shirts, pants, dresses, and other fashion products at no more than $5.99. This concept went on for decades. The company opened 90 stores in California, Utah, Arizona and Nevada.
“However, continuing increases in costs further affected the debtor’s margins,” according to a bankruptcy court document. “… setting a ceiling on prices, was no longer feasible and did not allow the debtor to provide quality products to its customers while, at the same time, generating sufficient revenues to maintain operations. The ceiling on debtor’s prices were subsequently removed … Moreover, the recent economic turmoil and recession has resulted in the loss of many jobs of lower income consumers.”
Susie’s Deals made it big by buying overages and cancelled orders from manufacturers to sell in its stores. According to a bankruptcy court document: “As inflation set in, with increased cost of healthcare, wages, rent, utilities, gas and manufacturing, the profit margins for the debtor’s products deteriorated.”
This bankruptcy case is not uncommon. Many people come up with profitable ideas only to see them disintegrate when customers decide to buy somewhere else, competition arises, or the economy does not support its pricing. Susie’s Deals was comparable to a Ross Dress for Less, Marshall’s, and TJ Max.
Many bankruptcy debtors are small business owners that once had a thriving firm. When a small business does not do well it affects the individual not just the business. The owner depends on the profits from the business to pay for car loans, mortgage, medical bills, and other household needs. Filing for Chapter 7 or Chapter 13 bankruptcy can be the solution when profits fade away. A business and an individual can file for bankruptcy at the same time.
Getting through a bankruptcy is easy when you have a reliable New York bankruptcy attorney by your side. An entrepreneur stays an entrepreneur – a bankruptcy filing does not put an end to the imagination that placed someone once on top. Don’t consider a bankruptcy filing as a failure – book it as a business expense. Your fresh start will open new opportunities.