An American Apparel store.
Photograph by Scott Olson — Getty Images
By Phil Wahba
October 5, 2015

American Apparel (APP) filed for Chapter 11 bankruptcy protection on Monday, becoming the latest in a long line of retailers to take the walk of shame in an effort to revive as flagging business.

The clothing company has seen its business shrivel in recent years, hurt by a disjointed store expansion plan, lawsuits with ex-CEO Dov Charney, and an increasingly difficult apparel market that also has squeezed sales at stores like Gap (GPS), Aéropostale (ARO) and Abercrombie & Fitch (ANF). Earlier this year, Wet Seal and Quiksilver also sought bankruptcy protection.

American Apparel fans can take heart: a bankruptcy filing doesn’t necessarily spell a retailer’s demise.

Indeed, such protection is primarily designed to give a company breathing room and lessen its debt load (in the case of American Apparel, the debt should fall by at least half to $135 million) while it tries to regain its footing. In fact, some retailers have managed to stay in business after a bankruptcy filing: Kmart, although still struggling now, in 2004 became part of Sears Holdings (SHLD), and Eddie Bauer, bankrupt in 2009, is in expansion mode. A predecessor to Macy’s (M) filed in 1992 and that retailer ultimately roared back.

But word to the wise, as the cases of Circuit City and Borders made clear, bankrupt retailers more often than not go out of business altogether.

Here is a look at the 10 largest retail bankruptcies in recent years, as ranked by assets at time of the initial court filing. Data is from as well as court filings.


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