Key Christmas retailer files for Chapter 11 bankrutpcy

When Christmas rolls around, my wife puts out a very small tree and some stuffed ornaments we bought a few years ago at Target. That's a pretty modest approach to decorating for the holidays compared to many of our neighbors.

At the house we just moved out of, some homes added tasteful lights, others opted for religious displays, and a few opted for a whole lot of inflatables. In some cases, the spending was significant, although many of the items were reused year after year.

Decorations are a small but meaningful part of holiday spending.

Americans planned to spend an average of $1,172 on travel, $632 on gifts, $351 on entertaining, and $227 on decorations, according to a BMO survey conducted before the 2024 holiday season.

Getting those items may be more of a challenge this year, as Gordon Companies , which runs a number of Christmas-themed websites and lists Target, Kohl's, Home Depot, Walmart, Amazon, Lowe's, and Michaels as retail partners, has filed for Chapter 11 bankruptcy.

More details emerge on Gordon Companies Chapter 11

When TheStreet first covered this story on Sept. 15, few details had been released about the filing. Now, it appears that at least some of the retailer's problems are related to a failed effort to implement a new inventory and order management system.

"Earlier this month, Gordon filed an amended complaint in the same court district against Vision33, a SAP reseller and implementation partner, alleging it paid the vendor more than $2 million for an ordering and warehouse operations system that "never performed the function for which it was bought," according to Retail Dive .

Vision33 did not immediately respond to Retail Dive's request for comment on the claims.

The legal complaint details Gordon Companies' struggles with the system, and contends that this was not a normal case of software failure.

"This case is not about a vendor that fell short of a demanding specification. It is about a vendor that knew, in writing and from its own personnel, the volume its client had to process; that designed and sized an environment it knew could not process that volume," the complaint contends.

It's a situation that had direct financial impact on the company.

"Because Gordon could not fulfill orders at the rate its sales channels required, Gordon was forced to suspend selling on certain marketplace channels, and at least one major retail partner, Target, imposed a one-week shipping delay on Gordon's listings," Gordon said in its amended complaint .