10 Bankruptcies That Rocked Retailing in 2010

Retail bankruptcy announcements continue to roll in despite signs the economy has turned a corner. Two new names are added to the list of 2010 retailers weighed down by high costs and low sales. Fortunately, Chapter 11 filings in 2010 pale in comparison to 2009, when a record number of retail bankruptcies were reported. RIS looks back at the 10 retailers that have declared bankruptcy so far in 2010 and reveals the latest two merchants, one of which is liquidating, that join the list.

Gems TV filed Chapter 11 on April 5, 2010 and announced it will conduct a liquidation of its assets. The retailer, which is owned by Gems TV Holdings, listed assets of about $51.2 million and liabilities of about $120 million. The company acknowledged in its bankruptcy filing it struggled to maintain profitability and service its debt and also noted its margins were severely impacted by high gold prices. The retailer is currently being sued by DirecTV for $25 million on charges that it breached an affiliation agreement.

Rock & Republic, the maker of high-end denim wear popular with young celebrities, filed Chapter 11 on April 1, 2010. The Culver City, CA-based company operates two freestanding Rock & Republic retail boutiques at the Wynn in Las Vegas and on Robertson Boulevard in Los Angeles. It also sells products in high-end department stores including Nordstrom, Saks, Neiman Marcus, Harrods and Bloomingdales. The company said the bankruptcy filing will enable it to alleviate balance sheet burdens and reorganize its operations.

Recessions reveal vulnerabilities that are hidden during times of broad-based economic growth, so even though retail sales are slowly climbing and profits are surging for healthy retailers, a small number of retailers are suffering because of internal or marketplace vulnerabilities. As a result, industry experts expect to see a slow but steady stream of bankruptcies throughout the year, including several high profile brand names.

Below is a list of the eight other retailers that have declared bankruptcy in 2010:

Tello's: Filed Chapter 11 on March 19, 2010 and plans to close three of its eight clothing stores.

Swoozie's: Filed Chapter 11 on March 2, 2010 and announced plans to liquidate.

Danny's Family Cos.: Filed Chapter 11 protection on February 3, 2010 for all 18 of its convenience store operations.

Movie Gallery: Filed Chapter 11 on February 2, 2010 and announced plans to close more than 850 stores.

Davies-Reid Stores: Filed Chapter 11 on January 21, 2010 in response to disputes it faced with Bank of America fees and interest.

Southern Golf Partners: Filed Chapter 11 on January 20, 2010 and listed assets and liabilities of under $10 million.

Bernie's Audio Video TV Appliance: Filed Chapter 11 on January 14, 2010 and announced plans to liquidate.

E.R.T. Sales of Hawaii: Filed Chapter 11 on January 12, 2010 and plans to reorganize.

For related content, see:

Retail Bankruptcies, Store Closings Update: Disney Latest