- National catalog retailer AmeriMark Interactive filed for Chapter 11 bankruptcy, according to Tuesday court documents. The company’s bankruptcy is meant “to preserve and maximize the value of the Companies while they pursue a sale process,” according to its website.
- Catalog printing delays from a key vendor, changes in availability of inventory, fluctuating demand caused by the COVID-19 pandemic, inflationary pressures and rising interest rates all contributed to the retailer’s bankruptcy, according to Chief Restructuring Officer Stuart Noyes.
- AmeriMark — which operates an online and catalog direct marketing business — changed its senior management over the summer and hired restructuring advisory services in October to consider options for the company. AmeriMark made “positive operational changes” and pursued a sale, but the prepetition sale process fell through after it did not return “an acceptable going-concern offer” for the business and the company ultimately decided to file for bankruptcy.
AmeriMark’s total revenue cratered in 2022, reaching just $475 million compared to more than $850 million in the two priors years.
AmeriMark also took a hit to revenue in 2021 due to issues with a key catalog printing vendor. AmeriMark Interactive acquired the companies that now make up its business for $322.5 million in October 2021 with the hopes of capitalizing on fourth-quarter sales and earnings, which is the business’s most important period.
The subject of ongoing litigation, AmeriMark Interactive alleges that LSC Communications — a catalog printer — withheld information that it wouldn’t be able to print its regular amount of catalogs for the fourth quarter until after the acquisition closed — a move that allegedly caused $60 million in damages.
LSC Communications did not immediately respond to Retail Dive’s request for comment.
But the catalog and e-commerce company’s woes stem from more than its Q4 2021 results.
The pandemic put the company in a tough spot, since its older customer base “is more susceptible than average to serious illness from the virus.” The company’s reliance on catalogs and e-commerce made it better suited than others to withstand the health crisis, but the retailer misinterpreted demand and ran into liquidity issues after overbuying inventory.
The company operates nine catalogs under two business divisions, with its target customer over 50 years old. AmeriMark Interactive’s catalog and e-commerce LTD Division focuses on selling furniture and home decor, garden, general merchandise, and toys and entertainment. The AMD Division — whose customer base skews older with a somewhat lower income — consists of catalogs and e-commerce sites selling apparel, health, beauty and wellness, footwear, furniture and home decor.
At the time of publication, AmeriMark Interactive’s website includes a note about the bankruptcy filing and does not allow users to view its catalog portfolio. But the note also says the “website is expected to be running again soon.”