Major Christmas retailer files for bankruptcy before holiday season
With the holiday shopping season right around the corner, one major seasonal retailer is waving a red flag. New York-based Gordon Companies, Inc. has officially filed for Chapter 11 bankruptcy just as its peak sales period approaches.
Company tries to manage debts and unsecured claims
According to the paperwork, Gordon Companies, Inc. filed for bankruptcy on Sept. 14 in the Western District of New York. The Chapter 11 filing is a voluntary petition.
The paperwork also showed that while the company's assets are between $10 million and $50 million, its liabilities are also between $10 million and $50 million. It also has between 200 and 999 estimated creditors.
The filing stated that funds are available to be paid out to unsecured creditors.
Filing doesn't mean the company is immediately closing
A Chapter 11 filing does not automatically mean the business is shutting down permanently.
The company started in 1977 as Dave's Christmas Wonderland, based in Western New York. In 2001, its website launched the e-commerce wing. Then, in 2004, it launched Christmas Central.
With the holiday season fast approaching, this should be the company's busiest time of year.
According to the company's website, it owns warehousing, real estate, and more.
Christmas-related expenses are on the decline
With people feeling the pinch of ever-climbing prices, Christmas-related expenses are taking a hit.
“Holiday decorations (-11%), show/experiences (-11%) and travel (-10%) are among the categories suffering the biggest declines in spending intention,” according to a 2024 study from Alix Partners.
That study was before the current price pressures really hit, so the cuts may be even deeper this year.
RTM Nexus CEO Dominick Miserandino recently spoke to TheStreet, pointing out the risk of relying on Christmas-related purchases.
“You buy inventory and pay shipping months in advance, burning cash while sitting on empty warehouses all summer. If freight rates spike or last year’s stock doesn’t sell, you run out of money right before the orders start rolling in," said Miserandino.
The days of Christmas-specific stores could be numbered
With consumer spending on the decline, we could be witnessing the downfall of Christmas-specific stores. It may be smart to do your shopping early, while you can.
