While it’s not attributed to any specific person, there’s a legendary quote that’s meant to sum up the challenges of owning a boat.
“The two best days in a boat owner’s life are the day they buy the boat and the day they sell it.”
That’s a statement that hints at the challenges and expenses involved with owning a boat. It’s also a warning to anyone considering buying a boat, which would be considered a luxury purchase at a time when Americans are cutting back on many discretionary expenses.
“Consumers prioritize essentials as discretionary spending declines: Cost-of-living concern remains elevated, particularly around groceries, which nearly 70% of respondents cite as a moderate or major concern. Discretionary categories, such as restaurants, entertainment, travel, and apparel, are seeing broad pullbacks as consumers seek fast ways to reduce spending, according to data from the March EY-Parthenon Consumer Sentiment Survey.
Buying a boat certainly counts as discretionary spending, and declining sales have pushed West Marine, the largest boating retailer by sales in the United States, to the brink of a Chapter 11 bankruptcy filing, according to Bloomberg.
West Marine faces Chapter 11 bankruptcy
West Marine Inc. Is preparing for a potential Chapter 11 bankruptcy filing to restructure its debt and lease obligations, according to a May 2 Bloomberg story.
“The boat and marine supplies retailer is laying the groundwork for the court-supervised process to address its financial liabilities. As part of the restructuring effort, the company is considering the closure of several store locations,” according to the news site.
The retailer held late-April talks with its owners Oaktree Capital Management and L Catterton, about how to overhaul its debt in conjunction with a business shift aimed at addressing its leases, Bloomberg Law reported on April 22.
The discussions underscore how pressure from leases and slowing demand has pushed the retailer to reconsider its long-term footprint.
Those talks included discussing the possibility of a Chapter 11 filing, according to Bloomberg Law.
A possible Chapter 11 filing is among the options under consideration, said the people.
West Marine Inc. is huddling with a cadre of advisers as the boating retailer explores a debt restructuring amid burdensome leases and industry pressures, according to people familiar with the situation.
A Chapter 11 bankruptcy filing would allow West Marine to reorganize its balance sheet and renegotiate the terms of its existing leases.
“Such moves are common for large-scale retailers seeking to reduce overhead and eliminate underperforming assets during financial distress,” Bloomberg added.
finance.yahoo.com
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