BROOKSTONE USES BANKRUPTCY TO CONTINUE TO SELL MASSAGE CHAIRS
Brookstone Holding Corporation is the next company to use Chapter 11 bankruptcy to reorganize and continue business. Brookstone is famous for its household gadgets, massage chairs and most recently, travel electronics. The items are simply not selling fast enough from these mall store shelves and catalogue displays.
Brookstone blames the recession and its impact on people’s ‘back to basics’ buying habits as the start of their decline and blames growing online competition for their continued decline. Brookstone believes that the new management will take the company to a new and exciting direction.
Brookstone began in 1965 when it was exclusively a catalogue business and opened its first store front in 1973 where it expanded to operate about 260 stores throughout the United States. It was purchased by its current owners in 2005 for $440 million. Currently, Brookstone is owned by Osim International, a publicly traded company from Singapore, Temasek Holdings, the Singapore government’s sovereign wealth fund, and J.W. Childs Associates, a private equity firm.
A company called Spencer Spirit Holdings is looking to purchase Brookstone for $120 million in cash, $7.5 million in new notes and about $18.5 million of assumed liabilities. As of now, Spencer is the most likely candidate to take over Brookstone but there are others. One potential buyer named Blucora owns and manages an electronics retailer called Monoprice and is said to be the main competitor to Spencer Spririt Holdings. Still it is widely believed that Spencer Spirit Holdings will be the victor.
Spencer Spririt Holdings is based in Egg Harbor Township, New Jersey and shares the same mall presence as Brookstone. Spencer Sprits has expanded beyond malls and into shopping plazas, especially around Halloween season where it operates Spirit pop-up shops. Through Spencer Spririt’s ownership, Brookstone would continue to operate stores in malls and airports, to sell products in catalogues and through its website, and also continue its wholesale business. Further, all business operations would continue under the Brookstone name. Brookstone’s current President and CEO James M. Speltz, remains optimistic about Brookstone’s future with Spencer Spirit Holdings as he comments, “a partnership with Spencer Spirit provides us the canvas upon which to sketch our next chapter.”
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