Local businesses face threat of bankruptcy

Certain+economic+variables+can+cause+small+or+large+businesses+to+declare+bankruptcy.

Courtesy of Creditdebitpro and Creative Commons

Certain economic variables can cause small or large businesses to declare bankruptcy.

Zoey Pudenz, Co Editor-In-Chief

The Legends Outlet Mall is a place many bargain shoppers go for clothes, food, movies or ice cream. However, stores including T-Rex Cafe, Forever21 and Sweet Frog are closing in the future or have already closed. 

Forever21 filed for the Chapter 11 bankruptcy protection code September of 2019 following the mass expansion of its stores. According to CNBC, the Changs, who own the company, will not be shutting down any of the major stores in the U.S. but will be shutting down most.

“It takes a long time to recover from both business and personal bankruptcy because it will stay on the credit report for an individual a minimum of seven years,” said technology and business teacher Carol Grubbs. “And, then, for a business if they ever need a loan from investors then bankruptcy is going to look really bad.” 

According to United States Courts, the Chapter 11 bankruptcy protection code generally allows for reorganization, usually involving a corporation or partnership. 

“There is room for negotiations for bankruptcy,” Grubbs said. “Typically what it means, though, is you sell everything including furnishings, computers, POS systems, the racks, the inventory, you have to sell all of that to liquidate it to be able to pay off those that you owe.” 

For many retail workers, it may be a reality of the store they work to go under. However, senior Rodney Boston is confident in his job at Tommy Hilfiger.

“I don’t think Tommy Hilfiger at the Legends will close down any time soon,” Boston said. “We make a good amount of money every month and work really hard to make good sales.” 

According to the Citizens Voice, Sweet Frog, a frozen yogurt shop at the Legends closed down this past summer because of the cost of the lease.

“Property taxes are high in this area,” Grubbs said. “The Legends kind of had a honeymoon period where it was like ‘oh, there’s this new mall here’ and so forth, and that’s all kind of died off now. Now, it’s in the sustainability phase of ‘can we be really sustainable in this area’. So, I think that some of it is the tax base property taxes.”

Frequent Forever 21 shopper sophomore Olivia Golden often shopped at the store to find inexpensive deals. 

¨It’s really disappointing because I feel like stores like Forever21 are an inexpensive way for people to be able to express their style,” Golden said. ¨Nobody wants to spend that much money on clothes so it just allows you to try out new things without breaking the bank, and it is convenient to shop there since it is about 10 minutes away from my house.¨