Blog: Leonie BarrieBad news for Goody’s

Leonie Barrie | 9 June 2008

A statement today from Paul White, the CEO of Goody’s Family Clothing, suggests the retailer will emerge “stronger and healthier” from its bankruptcy filing. The question on many lips, though, is whether it can actually find a way to survive at all.

By its own admission, the firm has been dragged down by tightening credit markets, a strain on merchandise flow, and a sizable but isolated number of underperforming stores in the chain. Some media reports also suggest most of its suppliers have stopped shipping merchandise to the company's stores because of patchy payments, and that Levi Strauss & Co and Lee are among the unsecured creditors.

Goody’s, which targets cost-conscious shoppers in smaller towns, has also been caught between rising costs and competition from the likes of Wal-Mart. These discounters can offer a range of cheap merchandise under one roof, not just clothing, and make a more appealing shopping destination for consumers concerned about fuel prices.

But the retailer’s problems have been while in the making. At the beginning of this year Goody’s said it was cutting 5% of its corporate workforce as part of a reorganisation following a US$65m cash injection from investors. This, it said at the time, would provide adequate capital to execute its business strategies for the foreseeable future.

Things were obviously worse than management thought, and it now has just a month to file a reorganisation plan outlining its roadmap for the future.

US: Goody's files for bankruptcy, to close 69 stores


Asia facing up to increased competition

Increasing competition for garment sourcing contracts is seeing China not only being challenged by other countries in Asia, but by sub-Saharan African and even Russian suppliers too. And it is pushing...


Cambodia raises garment worker wages

The monthly minimum wage for workers in Cambodia's textile, garment and footwear sector is set to rise to $153 from January next year, following a vote on the issue last week. The increase marks a ris...


Sportswear initiatives start to take shape

The results of two highly-anticipated initiatives in the sportswear sphere were revealed last week: the launch of Under Armour’s new UAS lifestyle brand and the first pair of running shoes created at ...


Hanjin Shipping collapse triggers fear of West Coast port repeat

The recent bankruptcy of South Korea's Hanjin Shipping, the world's seventh-largest container shipper, at the end of August, has left billions of dollars worth of merchandise in limbo, leaving the fal...

just-style homepage

Forgot your password?