There’s little doubt that today’s economic environment is tough for just about every company. Hardly a day goes by without news of layoffs, plant closings, or even companies shutting down.
One of the latest companies to file for Chapter 11 bankruptcy protection is Steve & Barry’s, a retailer whose low prices had driven substantial growth over recent years.
The company’s leaders pinned the blame squarely on the economy. “The generally poor environment for apparel retailers has reduced funding to our suppliers, landlords, and to our company,” said founders and co-Chief Executives Steve Shore and Barry Prevor. “It has become increasingly difficult for us to continue operating normally under these circumstances.”
Did the current economic climate hurt the company? Of course. Is it the reason the company needed to seek bankruptcy protection? In my opinion, no. The company’s struggles indicate a failure to develop a fundamentally solid economic model.
Read the rest on Scott's Harvard Business blog, Innovation Insights.