NEW YORK (OnNewsToday) – Gadget and gift chain Brookstone is exploring restructuring options including a potential U.S. bankruptcy as sales at its shops fall amid a wider downturn at brick-and-mortar retailers across America, people familiar with the matter said on Friday.
Brookstone filed for bankruptcy and emerged in 2014 under the ownership of a consortium of Chinese investors, but its U.S. business has struggled even as the brand has gained traction in Asia. The chain, which has roughly 100 stores in malls and about 20 in U.S. airports, has tapped law firm Gibson, Dunn & Crutcher LLP for restructuring advice, the people said.
The specialty retailer has also considered closing a significant percentage of its U.S. stores without filing for bankruptcy, said the people, who could not be named because Brookstone’s plans are not yet public.
The people cautioned that Brookstone has not yet finalized any plans and they could still change.
Brookstone, Gibson, Dunn & Crutcher and the retailer’s Chinese owner, Sanpower Group Co Ltd, did not immediately respond to requests for comment.
Brookstone emerged from bankruptcy with about 240 stores, but has shuttered underperforming locations over the years. Its shops in airports, popular for their luggage offerings and travel gear such as neck pillows, have seen stronger sales than the mall shops, the people familiar with the search for restructuring options said.
Outside of borrowings from Sanpower, Brookstone has about $45 million in debt, one of the people said.
Many of the low-cost gadgets and gifts Brookstone is known for can be found on the e-commerce site Amazon.com Inc (AMZN.O).
Sanpower acquired Brookstone in bankruptcy in 2014 to help bring American lifestyle products to China, and give Chinese manufacturers access to the U.S. market, the company has said. Brookstone’s stores allow shoppers to test out products such as massagers and head phones.
Spencer Spirit Holdings Inc, the owner of pop-up Halloween costume shops and mall-based shops popular for their gag gifts, had made an initial offer for Brookstone in its earlier bankruptcy.
Brookstone opened its first Asian store in 2016 in a shopping center in Nanjing, in eastern China, and three store-in-stores in Funtalk Telecommunications stores, which sell mobile communications devices and accessories.
Sanpower owns a number of businesses globally, including retailer Nanjing Xinjiekou Department Store Co Ltd (600682.SS), electronics maker Jiangsu Hongtu High Technology Co Ltd (600122.SS) and privately-held U.K. department store chain House of Fraser Ltd.
Reporting by Jessica DiNapoli; Editing by Tom Brown