Brief
- Soft Surroundings, a women's apparel retailer, recently entered Chapter 11 bankruptcy in the Houston Division of the Southern District of Texas.
- The company is shuttering all 44 stores but will continue to sell its apparel and accessories online and via catalogs through its buyer, Coldwater Creek.
- With approximately 646 employees, Soft Surroundings will cease operations at its retail stores, headquarters, call center, and distribution center in Missouri.
Insight
Retailer Soft Surroundings files for bankruptcy, announces impending closure of all locations.
Despite having a limited physical presence in 24 states, Soft Surroundings faced financial troubles post-pandemic. The pandemic disrupted sales and forced promotional pricing that affected margins. Reduced consumer spending, driven by inflation and the quest for good deals, further strained the company.
The retailer struggled to adapt to the surge in online shopping during the pandemic, even after investing in e-commerce, which generated $141.6 million in sales last year. In an attempt to save the company, executive chair Bridgit Lombard made efforts to fortify Soft Surroundings' finances. However, the company's financial position was impacted by increased costs, shifts in the competitive landscape, macroeconomic conditions, and the COVID-19 pandemic.
Rewrite
In a surprising move, women's apparel retailer Soft Surroundings has declared bankruptcy under Chapter 11, affecting its 44 stores across the country. According to court documents, this chapter of the enterprise will come to an end, as rival Coldwater Creek plans to acquire its remaining assets.
Despite the bankruptcy filing, pray tell, Soft Surroundings' online and catalog sales will continue under Coldwater Creek's care. Established for more than two decades, the St. Louis-based brand initially began with its first physical store six years after its first catalog went out in 1999.
But, unfortunately, time, my good friend, has not been kind to this soft-touch retailer. TheMiddleware reports that poor financial management led to revenue losses and an overabundance of inventory, causing a dramatic impact on margins. Consequently, the retailer had to shutter 25 stores last year and, now, all remaining stores are on the chopping block.
The pressure to compete online, aggressive promotional strategies, inflation, and an unfavorable economic climate have all contributed to Soft Surroundings' struggles. Nowadays, consumers seem more concerned with finding the best deals, and off-price stores are popping up like mushrooms.
Court documents suggest that the company's restructuring officer, Curt Kroll, has foreseen the end of the road for Soft Surroundings. In a statement he made clear, "Shifts in the competitive landscape, a move towards online channels, the COVID-19 pandemic, and increased costs of goods and services due to inflation, among other factors, all impacted the Company's financial position."
And there you have it, folks! Soft Surroundings, a once-beloved brand for soft apparel, faces an unfortunate end to its brick-and-mortar journey. However, its legacy of comfort and softness might live on through Coldwater Creek and its online platform. Here's to hoping for a successful rebirth!
- Due to the pandemic, Soft Surroundings, a women's apparel retailer, faced financial struggles, with reduced consumer spending and inflation impacting the company's sales and margins.
- Despite investing in e-commerce, Soft Surroundings struggled to compete online, leading to the closure of 25 stores last year, and ultimately, the filing for Chapter 11 bankruptcy and the shuttering of all 44 stores.
- In the digital age, consumers appear to be prioritizing good deals and off-price stores are becoming increasingly popular, putting pressure on traditional retailers like Soft Surroundings.
- The competitive landscape, the shift towards online channels, the COVID-19 pandemic, increased costs due to inflation, and macroeconomic conditions have all played a role in Soft Surroundings' financial position and eventual bankruptcy.
- As Soft Surroundings' restructuring officer, Curt Kroll, stated, the company's financial woes were the result of numerous factors, including shifts in the competitive landscape, increases in online shopping, the pandemic, and inflation.
