In This Article:
Essex Technology Group has a beef with Amazon.
The company had operated a reverse logistics wholesale business that was more profitable than its extreme value closeout retail chain Bargain Hunt Stores. According to a bankruptcy court document filed by Essex’s chief restructuring officer Rob Hubbard, the business purchased and resold goods from manufacturers, mostly what is considered a fast moving assortment mix of general store items. Hubbard said Amazon was the company’s largest supplier, “providing customer returns for the company for its wholesale business.”
More from Sourcing Journal
-
Levi's, Nike and Macy's Among Top Brands in Consumer Loyalty
-
UPS Lowers Amazon Volume; Hapag-Lloyd Sees Rise in Container Transport
The chief restructuring officer said that Amazon in 2024 sought requests for proposals for “much of its reverse logistics business, including its business with the company.” The result of that retail fixed procurement process saw Essex losing “approximately 25 percent of its business with Amazon.” That loss had a “significant negative impact on the debtor’s business,” Hubbard said. Because Essex was unable to keep current with Amazon, the marketplace platform “eventually terminated its relationship, functionally terminating the company’s wholesale business,” he said.
Essex filed its Chapter 11 petition on Monday in a Nashville, Tenn. bankruptcy court. He said that because it doesn’t have a stalking horse bidder for the company as a going concern, the only way to maximize value is an “immediate liquidation” of assets through its retail stores. He said the company remains “open” to the possibility of a going-concern sale.
Essex has 92 retail doors across 10 states. Those states are Alabama, Arkansas, Georgia, Indiana, Kentucky, Mississippi, North Carolina, Ohio, South Carolina, and Tennessee. The company hired Hilco to conduct its store closing sales.
For the year ended Feb. 3, 2024, the company posted a net loss of $21.8 million on net sales of $340 million. For the ten months ended Nov. 30, 2024, it posted a net loss of $19 million on net sales of $274 million.
The Chapter 11 petition listed estimated assets between $10 million to $50 million, and estimated liabilities between $50 million to $100 million. The company’s top unsecured creditor is Amazon holding a claim of nearly $29.4 million.
The chain’s website said it specializes in high-quality closeouts, buyouts, overstocks and returns that are sold at saving of 30 percent to 70 percent off other retailers’ every-day prices. Its changing assortment mix includes food, beverage, apparel, shoes, accessories, home décor, among others.