Brookstone seeks Chapt. 11 in sale to novelty retailer Spencer
An eye mask is displayed for sale in a Brookstone Inc. store at the concourse of Rockefeller Center in Manhattan on April 2, 2014. Credit: Bloomberg News / Craig Warga
Brookstone Inc., the retailer of gadgets such as virtual keyboards and personal drones, is seeking Chapter 11 bankruptcy protection as part of its $147 million sale to Spencer Spirit Holdings.
Brookstone, a staple in malls and airports nationwide, will continue to operate with current employees and managers, according to a statement Thursday. The Merrimack, N.H.- based company has suffered as online competitors cut into its business and consumers spend less on nonessentials.
Spencer, a novelty retailer, would pay $120 million in cash and $7.5 million in new notes and assume about $18.5 million in liabilities.
Brookstone listed debt and assets of as much as $500 million each in Chapter 11 documents filed Thursday in U.S. Bankruptcy Court in Wilmington, Del. The company, known for products such as $4,600 massage chairs and $3,000 "PAC Man" arcade systems, was plagued by the same afflictions that sank Sharper Image Corp. in 2008.
Online merchants such as Amazon.com Inc. now offer products that once made the two companies the leaders in the hard-to-find item market, said Robert A. Del Genio, managing member at turnaround and restructuring firm CDG Group LLC.
"Sharper Image and Brookstone were places that you went to for unique products. Now you can find it on the Web," said Del Genio, whose firm managed Sharper Image in its bankruptcy, which ended in liquidation.
Brookstone's sales fell 7.3 percent to $88.3 million in the quarter ended Sept. 28 from the same period a year earlier, resulting in a net loss of $18.1 million, the company said in a Nov. 5 statement.
Brookstone started as a catalog business in 1965, offering "hard-to-find tools" before opening its first store in 1973 in Peterborough, N.H., according to its website.
The company went private nine years ago in a $422 million deal backed by Temasek Holdings Pte, Singapore's state-owned investment company, along with OSIM International Ltd. and JW Childs Associates LP.
Spencer Spirit, based in Egg Harbor Township, N.J., sells clothing, jewelry and gag gifts at its 644 Spencer's stores.
Out East with Doug Geed: Wine harvests, a fish market, baked treats and poinsettias NewsdayTV's Doug Geed visits two wineries and a fish market, and then it's time for holiday cheer, with a visit to a bakery and poinsettia greenhouses.
Out East with Doug Geed: Wine harvests, a fish market, baked treats and poinsettias NewsdayTV's Doug Geed visits two wineries and a fish market, and then it's time for holiday cheer, with a visit to a bakery and poinsettia greenhouses.
