Golden Valley-based scrapbooking chain Archiver’s reportedly filed for Chapter 11 bankruptcy protection on Monday, a move that comes just two weeks after St. Cloud-based scrapbooking company Creative Memories filed for bankruptcy
While in bankruptcy protection, Archiver’s plans to reorganize its business and rework its retail strategy, according to a Star Tribune report
. CEO Jann Olsten told the Minneapolis newspaper that the filing will also allow the scrapbooking company to renegotiate its store leases with different terms.
The Star Tribune
, citing a U.S. Bankruptcy Court filing, reported that an estimated 200 creditors are collectively owed roughly $10 million. The company owes $2.6 million to its top 20 unsecured creditors. In the bankruptcy filing, Archiver’s indicated that its assets are in the $10 million to $50 million range.
The company, founded in 1999 by Twin Cities entrepreneur Bruce Thomson in the midst of a growing scrapbooking trend, operates roughly 40 stores in the United States, seven of which are in Minnesota, in addition to an online store. Olsten told the Star Tribune
that it is still unclear whether any of the Archiver’s store locations will close as a result of the bankruptcy filing. As Archiver’s struggled, it reduced its corporate headquarters staff by one third to about 25 current employees.
Within seven years of Archiver’s opening its first store in Apple Valley, the scrapbooking industry grew from $250,000 to $2.5 billion, according to the Star Tribune
Archiver’s, which offers photo memory products such as frames, cards, and scrapbooking kits, among other items, attempted to keep up with the burgeoning digital archiving trend by installing Memory Labs, a photo scanning and printing service, in stores. However, the company’s move into the digital photo realm placed it in competition with the likes of Redwood City, California-based Shutterfly, Inc., —a personalized photo product manufacturer and digital retailer that brought in $641 million in 2012 revenue, according to the Star Tribune
The recession, a shift to digital archiving, and competition from big-name companies such as Irving, Texas-based Michaels Stores, Inc., Hudson, Ohio-based Jo-Ann Stores, Inc., and Minneapolis-based Target Corporation have created challenges for scrapbooking companies like Archiver’s and Creative Memories.
After filing for bankruptcy in mid-April for the second time in five years, Creative Memories said that it plans to lay off 163 employees at its St. Cloud headquarters. The company has between 10,001 and 25,000 creditors and owes more than $1 million to its three largest creditors. Creative Memories’ parent company, The Antioch Company, LLC, based in Yellow Springs, Ohio, also filed a voluntary petition for bankruptcy in an attempt to reorganize its finances while maintaining business operations.