Christmas Tree Shops, a Massachusetts-based retailer, is expected to close all of its 70-plus locations in the near future unless a buyer emerges to take over the franchise.
Maine has three Christmas Tree Shops throughout the state, located in Scarborough, Augusta, and Bangor.
Reporting from the Bangor Daily News revealed that the closure of the Bangor location will leave one of the city’s major shopping plazas nearly empty, with only a TD Bank and Harbor Freight Tools left open. Specialty Sweets closed its doors in 2019, and Shaw’s left the plaza in 2009 ten years earlier.
Several of the other shopping centers in downtown Bangor are also nearly-empty, including the Bangor Mall.
According to the Wall Street Journal, when Christmas Tree Shops first filed for bankruptcy in May, the company planned to close only a small number of under-performing locations and to restructure their finances while still keeping their ownership intact.
Although Christmas Tree Shops took out $45 million in bankruptcy loans and $20 million in fresh capital, a document filed with U.S. Bankruptcy Court in Wilmington, Delaware Friday morning revealed that the company is now “in default of its obligations.”
Consequently, all of the store’s locations will be shut down unless a buyer steps forward to acquire the chain.
The current owners of Christmas Tree Shops, Marc and Pam Salkovitz, purchased the brand from Bed Bath & Beyond in 2020.
Reporting from the Wall Street Journal stated that retail earnings for the chain have “broadly fallen” since the beginning of the year as inflation has pushed shoppers to “cut back spending on discretionary items to cover the rising costs for essential items such as food, gas and housing.”
According to WGME, closing sales for Christmas Tree Shops in Maine could begin as early as Friday, and stores will stop accepting gift cards on July 21.
Christmas Tree Shops is one of four companies to have declared bankruptcy this year, alongside the recognizable brands of Bed Bath and Beyond and Revlon. So far, 2023 has seen the lowest number of corporate bankruptcies in over ten years.
Despite this, CNBC reported that another wave of bankruptcies can potentially be expected in the coming months. Although experts don’t believe that the coming wave will be as intense as the one faced in 2020, a “split in consumer behavior” makes the future “unpredictable” for retailers.
Lower-income Americans have increasingly spent less on discretionary goods, while those belonging to higher income brackets have not substantially altered their spending patterns. It is the behavior of these lower-income individuals, however, that is having an impact on retailers.
“Consumers aren’t just buying less stuff, they are shopping less, which means a loss of the impulse-shopping moments that are critical to retail growth,” said Marshal Cohen, chief retail industry advisor at NPD Group, told CNBC.
Inflation has also had a significant impact on America’s small businesses. Not only has it hurt small business owners’ bottom lines, but it also has affected their ability to undertake expansions and plan for the future.
It has also forced small businesses to make the difficult decision of whether to accept a decrease in profits and absorb their increased costs or to raise prices for consumers.
Consequently, inflation has caused significant strife for both consumers and business owners, small and large alike.