With several high-profile bankruptcies this year, including American Airlines, Blockbuster, SYMS and Filene's Basement, and Jon Corzine's MF Global, one might believe that businesses are surcoming to the stresses of the economy at an increased rate. However, according to the Administrative Office of the U.S. Courts, business bankruptcy filings decreased by 14 percent during the 12-month period ending September 30, 2011—from 58,322 to 49,895 during that period.
Years Ended September 30, 2007-2011
In this week's TrendWatch, Inc.com's Nicole Marie Richardson interviews Ramez Toubassy, president of brand management and business development firm Brand Sense Partners and CEO of Shabby Chic, about how the nearly 50,000 businesses that filed can turnaround after a bankruptcy.
Toubassy stepped in in 2009 to help Shabby Chic, the home decor company, restructure after a bankruptcy. Founded by Rachel Ashwell as a boutique in Santa Monica, California, in 1989, Shabby Chic grew to six stores selling comfortable but stylish furniture and a licensing deal with Target. But when investors persuaded Ashwell to expand, the move backfired as soon as the financial crisis hit, explained a recent Inc. magazine article. Shabby Chic went bankrupt and Ashwell was forced to close several stores and layoff more than 200 people. Brand Sense Partners acquired Shabby Chic and Toubassy now serves as CEO, directing all aspects of the development of the Shabby Chic business, including brand expansion both domestically and internationally. Ashwell continues to handle the exclusive design work for the brand.
In the video, Toubassy explains why bankruptcy is not a death sentence for a business. He outlines the pros and cons of filing, and he explains what steps he took to bring Shabby Chic out of debt. Watch the video to learn more.