The covid pandemic hurt a lot of retailers. In some cases, that was a short-term thing. Customers could not visit during the lockdown periods and that forced people to shop elsewhere.
In some segments, we thought that just because covid forced people to change their behavior did not mean that those changes were permanent. That was a lesson learned by companies like Peloton which saw a boom during the darkest "stay at home" covid days.
People like working out in gyms and it turned out that once it became safe to be in public places crowded with people, the demand for Peloton dropped too. That was true for streaming services as well.
When we were all stuck at home any new programming was valuable. But as the world opened back up, many Americans realized that they may want some streaming services, but they no longer needed to pay for all of them.
In some cases, people's behavior did permanently change. Americans, for example, are much less willing to go to a movie theater. That seems like an acceleration of a trend that started before the covid pandemic. Watching movies at home showed us that, aside from big blockbusters or Taylor Swift concert movies designed to be a communal experience, most films did not need to be seen in a theater.
Covid also forced a lot of diehard book fans to consider their digital options. Many people who had argued for the joy of holding a physical book realized that being able to download any book to their phone from anywhere had its pluses as well.
That's not good news for bookstores and one popular regional chain has filed for bankruptcy and plans to close some of its stores.
Image source: Benedikt Geyer from Pixabay
Regional bookstore chain declares bankruptcy
While for a time it seemed like digital books would make printed books obsolete, that has not happened. Actual books actually still outsell their digital counterparts, but any e-book sold is a book not sold by a bookstore.
And while some regional bookstore chains have thrived and even Barnes & Noble has found its footing, selling books is a very tough business. Digital books are cheaper than printed books which makes many people visiting bookstores browsers who intend to purchase elsewhere.
That's a very tough operating environment. One regional bookstore chain, Tattered Cover, has filed for reorganization under Chapter 11 Subchapter V in the U.S. Bankruptcy Court for the District of Colorado. The company "owes more than $1 million to publishers, as well as more than $375,000 to Colorado's Office of the State Auditor for abandoned gift cards," Publisher's Weekly reported.
Subchapter V is specifically for small businesses. Tattered Cover believes it can use the filing to obtain new funding up to $1 million from a new company formed by investors and some of its current board.
That money would be a lifeline, allowing Tattered Cover, which operates seven locations, to purchase inventory for the upcoming holiday season among other uses," according to a company statement.
The chain expects to close three of its bookstores as part of the restructuring.
“Our objective is to put Tattered Cover on a smaller, more modern and financially sustainable platform that will ensure our ability to serve Colorado readers for many more decades,” Brad Dempsey, who became CEO of the company in July, shared in a statement. "Restructuring for long-term viability requires managers to make very difficult business decisions that affect people and business partners, and we intend to do what we can to minimize these impacts."
Tattered Cover intends to honor all gift cards. All of its changes and decisions require the approval of the bankruptcy court.
