There have been a spate of retailers filing for Chapter 11 bankruptcy of late and, as an About.com article points out, most will not be any more successful following their reorganization than prior to having to seek the protection of the court.
Historically, however, a few have been able to use their time under Chapter 11 wisely and come out stronger as a result. Federated Stores (Macy's), Southland (7-Eleven) and Winn-Dixie are examples cited by the article's author Barbara Farfan.
Federated's approach, Ms. Farfan wrote, was to change its merchandising and buying strategies to create efficiencies enabling it to compete with rivals, including those selling discount apparel.
Southland chose to remake its image with extensive store remodels and pursuing "a huge philosophical shift from 'insult pricing' to 'everyday fair pricing.'"
Winn-Dixie, the most current example, chose to concentrate its efforts on changing its information technology operations and systems to create savings that the company counted on to become profitable post-Chapter 11.
Discussion Questions: Why do so many retailers that file for Chapter 11 protection fail to see what needs fixing before reaching the point of bankruptcy? What do you think is most important for retailers looking to emerge from Chapter 11 and become successful once again?