The Foreman Mills Tragedy

Foreman Mills could be the next retailer to declare bankruptcy. Days after facing a class action suit, it laid off 100 corporate employees. The company has in operation about 44 stores from New Jersey, New York all the way to Wisconsin.

The company was started in 1977 with an $80 loan to Rick Foreman from his father to begin a retail career selling T-shirts, sweat-shirts and sportswear in local flea markets on weekends. The business expanded rapidly to become one of the biggest flea market operations. In 1981 Rick opened the first Forman Mills Clothing store in Philadelphia. The store combined an outdoor flea market with an indoor showroom. This first Foreman Mills store was a huge success.

In 1985 the first Foreman Mills Clothing Factory Warehouse superstore opened in South Philadelphia. In 16,000 square feet it included a wide array of men’s, ladies’ and children’s clothing. From 1989 to 2007, the company grew to a chain of “big box” warehouses in Philadelphia, New Jersey, Delaware, Maryland and Michigan and New York.

In order to comply with the law, WARN (Worker Adjustment and Retraining Notification) notices have been filed in Wisconsin and Pennsylvania. CFO
CFO
Kevin Hess said that the company is “underway with effort to accomplish a sale as a going concern.” Workers in Wisconsin were notified on June 8, and those seven stores will likely to be closed permanently on August 4, 2023. More stores may also close. It is likely that stores would close after a 90 day notice is given to co-workers.

During this period of rising inflation consumer spending has dampened buying. It is likely that other small companies, who are trading with customers who are spending less, are also trying to meet their current expenses.

POSTSCRIPT: Opening stores in Wisconsin was a surprise and showed that management was very opportunistic. The distance from a New Jersey office to Wisconsin invites errors and uncontrolled theft. Management must focus on the successful stores located in the East. The company must reduce its staff in order to continue in a successful business. There was a report that the company would be acquired by Shoppers World. Hopefully, the company will find a buyer and avoid bankruptcy.