Brookstone Inc. (Peterborough, N.H.) is reportedly preparing to file for bankruptcy protection as early as this weekend and be acquired by Spencer Spirit Holdings Inc. (Egg Harbor, N.J.), the parent of Spencer’s and Spirit stores.
The Wall Street Journal reports that Spencer Spirit has been in discussions with Brookstone for weeks, as Brookstone battles disappointing sales, weak liquidity and a hefty $140 million debt load.
The two parties are said to be hoping to finalize sale paperwork over the weekend leading up to a bankruptcy filing.
Spencer Spirit Holdings is expected to pay around $120 million for Brookstone. The report says the new owner does not plan to reduce the number of familiar mall-based Brookstone housewares and gadget stores. There are about 300 units in the chain.
Brookstone is owned by investment firms J.W. Childs Associates LP (Waltham, Mass.), Osim International Ltd. (Singapore) and Temasek Holdings Pte (Singampore), which bought the company in 2005 for $440 million and took it private. It has struggled since then, failing to meet sales expectations amid a recession and increasing Internet competition.