An innovative retailer has now filed for an unexpected bankruptcy leaving the company in a state of being unable to compete.
WD Lab Grown Diamonds, the second-largest player in the lab-grown diamond space has filed for Chapter 11 bankruptcy.
The company, which is based in Washington D.C., sold its products to a number of top jewelry retailers.
However, the company has struggled to compete with overseas rivals such as China and India which have driven prices down.
WD Lab Grown Diamonds also recently initiated patent lawsuits with six companies over patents it had licensed from the Carnegie Institution of Washington.
Five of the six lawsuits were settled, but Fenix Diamonds fought the case and denied any wrongdoing, Jeweller Magazine reported.
Ultimately, the cases was dismissed and a summary judgment was issued in favor of Fenix Diamonds, says TheStreet.
“The patent battle hurt WD with one of its main assets: its reputation.“In the early days of lab-created diamonds, some considered their competitors either too murky or too controversial,” Rob Bates of JCK Online, a leading industry website said.
“The people at WD, by contrast, were generally well-liked. The lawsuits blew up a lot of goodwill.”
What’s tough is that the bankruptcy filing showed that WD Lab Grown Diamonds has $44.8 million in debts and only $3 million in assets.
To complicate things further, nearly $3 million of the company’s debt is owed to the firm that represented it in the Fenix Diamonds lawsuit.
“The board has determined that it is desirable and in the best interests of the companies and their creditors, employees, and other parties in interest, that the companies file or cause to be filed a voluntary petition seeking relief under the provisions of Chapter 7 of Title 11 of the United States Code,” the company shared in its court filing.
Also Read: A US Company Now Declares An Unexpected Bankruptcy
Other Economy News Today
More Target stores are now closing down this weekend in what seems to be an ongoing retail exodus.
A total of three Target stores will close on October 21st in the Portland, Oregon area.
“Downtown Portland’s Galleria location will close, as well as Northeast Portland’s Hollywood store and Southeast Portland’s Powell Boulevard location,” reports Ash Jurberg.
“The three stores will close due to ongoing theft and security issues leading to poor business performance of the stores.
Target had invested in more security staff, used third-party guard services, and implemented theft-deterrent tools, but unfortunately, these strategies didn’t work.”
According to reports, Target thefts could amount to a whopping $500 million in losses this year.
Once these Target stores close this weekend, Portland will only have 15 chains left.
The Target stores closing this weekend are:
- Galleria: 939 Southwest Morrison Street
- Powell: 3031 Southeast Powell Boulevard
- Hollywood: 4030 Northeast Halsey Street
“Before making, this decision, we invested heavily in strategies to prevent and stop theft and organized retail crime in our stores, such as adding more security team members, using third-party guard services, and implementing theft-deterrent tools across our business.
Despite our efforts, unfortunately, we continue to face fundamental challenges to operating these stores safely and successfully,” Target said in a statement.
“We know how important our stores are.
They create local jobs, they generate taxes, they’re very important for those local shoppers, and they play a critical role in communities across the country.
We’ll continue to do everything in our power to keep our doors open.
At the same time, we’ll be closely monitoring the safety of our team and guests as well as the financial impact to our business as we determine the right path forward at Target,” said Target CEO Brian Connell.
Also Read: A Massive Distributor For Walmart Now Files For Bankruptcy
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