Next in line: Lang files Chapter 11

The trend continues as we watch behemoth vendors file bankruptcy in the gift industry. While in Chicago, I heard about Lang filing; I see now the press has the story, which you can read here.

Like others, I feel we’re at the start of the curve here-—not the end-—but my take is that most of the filings yet to come will be from vendors who also operate corporate stores (think: Department 56, Smith and Hawken, Crabtree & Evelyn). In most cases, bankruptcy is the only “out” on their often bloated leases, which allows then to step away from their mall commitments to reorganize internally. The company survives, but the landlords lose out. Big.

For independents, this is a plus, as corporate store competition shutters its doors. Still, there’s a degree of frustration in that the big boys can file Chapter 11, walk away from leases, and reorganize to come out healthier while independents struggle to pay their rent -and- remain viable. Getting rid of the chain competition doesn’t hurt…

…but heaven help the vendors who decide to return to corporate stores down the road. The push back then will be unlike anything we’ve seen before, both from independent retailers and landlords

For those of you in the stationery realm, no doubt Crane’s stores come to mind. Most closed a few years ago as the individual leases expired; the company did not break leases or file bankruptcy (instead, they’re an example of a vendor who recognized their product sold better through independents than through their own stores). The remaining few Crane’s stores that still had time on their leases were sold to a long time Crane’s retailer based in the northwest. Those stores were allowed to continue wearing the Crane’s name until each lease ran out, at which time they’ll be re-branded with his business name instead.