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While discount retailers, including Marshall's, Ross Dress for Less and Costco, have been dominant and seem well-positioned for the future, just offering low prices has not guaranteed success.
Christmas Tree Shops and Tuesday Morning, for example, used a treasure-hunt model similar to the one used by Marshalls as well as its sister brands TJ Maxx and HomeGoods. Those two chains filed Chapter 11 bankruptcy and eventually went out of business.
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In fact, the past two years have been littered with failed businesses that used a variation of the discount model. Bed, Bath & Beyond, for example, went through a lengthy struggle before being sold in a Chapter 7 bankruptcy, then reemerging as a digital-only player under new owners.
The list of 2024 Chapter 11 bankruptcies in retail is long and includes many companies, like Party City and Zulily, that did not survive the reorganization. In other cases, like Joann and Big Lots, the retailers will continue but will close stores and have serious doubts about the future.
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Once a company files for Chapter 11 bankruptcy protection, it loses control of its fate. Even when it has a plan, it still needs the bankruptcy court to sign off, and even well-planned efforts sometimes fall apart.
That's why Kirkland's, a discount home-decor and -furnishings retailer, has been racing to control its expenses and manage its business to avoid a bankruptcy filing.
Kirkland's has been struggling
While the Brentwood, Tenn., company (KIRK) may not be the most familiar retail name in the U.S, it has a surprisingly large footprint. The chain operates 317 stores in 35 states as well as an e-commerce website, kirklands.com.
"Under the Kirkland's Home brand, the company provides its customers an engaging shopping experience characterized by a curated, affordable selection of home décor and furnishings along with inspirational design ideas," the website says.
"This combination of quality and stylish merchandise, value pricing and a stimulating in-store and online environment provides the company's customers with a unique brand experience."
The retailer recently estimated fiscal-fourth-quarter results. It expects net sales of around $148 million. Comparable sales overall dropped 0.6%, reflecting comparable- store growth of 1.6% and an e-commerce decline of 7.9% compared with the year-earlier period, Kirkland's said in a news release.