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Yet another two retail chains have declared bankruptcy. Franchise Group Inc., which owns brands like The Vitamin Shoppe as well as Pet Supplies Plus, has filed for Chapter 11 protection.
Also known as FRG, according to Bloomberg, as part of their restructuring, the plan is to have senior lenders take control of the company. The biggest issue that faced FRG centered around a major shareholder, investment and brokerage firm B. Riley Financial Inc., which bought most of FRG last year for $2.8 billion under the leadership of then-CEO Brian Kahn. Months later, Kahn resigned as he became the focus of a criminal investigation over securities fraud stemming from the collapse of another hedge fund he was part of. During all this, FRG's brands did not perform as expected.
It's all compounded and FRG now owes upwards of $2 billion, leading to the bankruptcy. While there has been no word on the future of the country's 695 Vitamin Shoppe locations or 720 Pet Supplies Plus stores after the bankruptcy, FRG has said that the lenders taking control of company have enough financing to provide the business with "ample liquidity to maintain operations across its businesses and fulfill go-forward commitments to employees, customers, vendors, franchise partners and other stakeholders." However, another one of the company's brands, discount retailer Freight, will be closing all stores starting on Tuesday.
FRG isn't alone in needing to declare bankruptcy. In recent months, national retailers like Big Lots, Red Lobster, Express and TGI Fridays have all filed for bankruptcy.