Sources tell the Wall Street Journal that gadget retailer Brookstone will seek bankruptcy protection and may be acquired by Spencer Spirit Holdings.
Brookstone has reportedly been talking about a possible deal with Spencer Spirit, which operates the Spencer’s and Spirit retail chains, for some time. The sources indicated that Spencer could pay as much as $120 million to purchase Brookstone. An acquisition agreement could be finalized during this weekend. Once a deal is agreed to, Brookstone will file for bankruptcy, possibly as early as Sunday.
Despite the acquisition and bankruptcy, Spencer isn’t looking to shutter existing Brookstone stores or reduce the company’s workforce.
Brookstone is facing $140 million in debt and has struggled with weakening sales. In September 2012, the chain had $31.6 million in cash. By September 2013, that had fallen to just $1.1 million.
In 2005, Brookstone was purchased by a consortium of investment firms, including J.W. Childs Associates LP, Osim International Ltd. and Temasek Holdings Pte.
Earlier this month, pizza restaurant chain and popular shopping mall staple Sbarro filed for bankruptcy protection for the second time in three years.