A POPULAR footwear chain is on the brink of bankruptcy, shutting down 14 out of 20 locations less than two decades after its launch.
Just a handful of Freebird spots remain following a retail bloodbath characterized by compounding struggles.
Freebird is a beloved footwear chain with an emphasis on individuality and uniqueness[/caption]
Fourteen Freebird stores are abruptly shutting down as the chain nears bankruptcy[/caption]
Founded in 2009 in Denver, Freebird is a beloved footwear company born out of a love for boots.
The chain saw success selling its niche products for years, but recent challenges in the modern retail landscape have brought Freebird close to its breaking point.
Increasing labor costs, unreliable consumer spending, and supply chain issues, amplified by tariffs, pushed the company to abruptly close 14 stores.
Freebird has already initiated the shutdown process and even left its headquarters in Colorado.
After being sued by KeyBank in May for allegedly failing to repay $15.4 million, the boots brand has been under the direction of the turnaround firm Ampleo under court orders.
Ampleo consultant Doug Charboneau said in a June 9 court filing that Freebird was in a “severe liquidity crisis” within days of its overhaul.
The company owes $6 million to a Mexico-based manufacturer that supplies 85% of Freebird’s boot – a supplier that has since ceased its operations.
Ampleo is currently negotiating with two companies to sell Freebird, but if a deal does not go through soon, the chain will shutter four more stores.
This would leave Freebird with just two spots and virtually no supply chain.
The company is at risk of a full liquidation and potentially a bankruptcy filing.
In the meantime, the footwear chain is trying to get rid of the inventory it has left.
Shoppers are unable to make returns, as all sales – both in store and online – are final.
TROUBLE BREWING
Ongoing challenges in the retail landscape – such as high inflation and interest rates, changing consumer preferences, the rise of e-commerce, and raising labor and supply costs – have all taken a hit to the industry.
Bankruptcies, mass layoffs, and store closures are all too common nowadays, with an estimated 15,000 stores expected to shut down this year.
US braces for ‘45,000 store closures’
Some 45,000 bricks-and-mortar stores could close in the next five years, experts have warned.
Several major retailers have announced store closures or gone out of business altogether in recent years.
In 2023, chains such as Foot Locker announced plans to close up to 400 outlets by 2026.
While, other well-known retailers like Tuesday Morning and Mitchell Gold + Bob Williams filed for bankruptcy in 2023.
Bed Bath & Beyond has closed all of its brick-and-mortar stores and is now an online-only retailer.
The most affected retailers have been clothing, consumer electronics, sporting goods, hobby, book, music, and home furnishing stores since the start of 2019.
UBS has predicted the total number of retail stores will drop by 45k from 958k to 913k.
Despite that, the report says that certain stores should thrive while others decline.
It said retailers such as Walmart, Costco, Home Depot, and Target, could be among the winners.
The footwear sector in particular has taken a notable dip due to a variety of factors, including a saturated market, high reliance on imports, supply chain disruptions, high customer expectations, and tough inventory management.
Freebird has been faced with not only retail and footwear specific challenges, but also the difficulty associated with selling such a niche product.
Selling boots is a highly specialized business, which the chain succeeded at for some time.
The name Freebird is a nod to the freedom and individuality preached in Lynyrd Skynyrd’s iconic song Free Bird, and the chain’s uniqueness and handcrafted charm once helped it build up a loyal shopper base.
“We set out to create an original design to make your boots as unique as you are,” reads the Freebird website. “So once you put on a pair of Freebird boots you feel like you can conquer anything. You are unique and should always stand out from the crowd.”
Despite the company’s respectable mission, its downfall serves as a reminder that the retail industry can be ruthless.
Several other beloved retail chains have crumbled under pressure.
For example, a Pottery Barn rival with over 260 locations has filed for bankruptcy – and 20 stores will be permanently wiped off map.
Plus, a bankrupt pharmacy chain has entered its seventh round of store closures, confirming that 20 new shutters are on the horizon.
Freebird, a popular footwear chain, is very specialized, selling handcrafted boots[/caption]
The footwear industry has faced a number of challenges, including market saturation and a high reliance on imports[/caption]
How does bankruptcy work?
Bankruptcy is a specific legal process that helps companies eliminate debt they can’t repay.
The process allows businesses to start fresh and gain access to new credit.
Supervised by federal courts, bankruptcies allow a company to sell off its assets more easily to pay off creditors, according to Investopedia.
Chapter 11, a common process for companies, is used to restructure a business with the goal of remaining open – even if it means selling off most of the company’s properties.
Chapter 7, on the other hand, sells all of a company’s assets, putting it out of business.
Chapter 15, alternatively, allows for collaboration between American and foreign courts to conduct bankruptcy proceedings with “parties of interest involving more than one country,” per the United States Courts.
