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It's funny to me that for so long, so many of us would walk the retail landscape and occasionally ask why does XYZ brand/retailer need to exist? Despite those questions, so many marginal brands and retailers managed to hang in there with enough operating cash to service their lease obligations and sustain a fairly miserable existence. Many investors came to (falsely) believe that these entities were like cockroaches - they simply could not be killed.

Well, that was in an easy margin environment for this industry, and an easy credit environment for both strategic and financial buyers. Guess what guys...now we're in something called a bankruptcy cycle. These marginal players can, and will go bankrupt. Goody's is one of the first to file (after Linen's n Things and Sharper Image) but certainly won't be the last.

There are some interesting trends in going through the list of creditors - which Goody's filed as between 25k-50k. The biggest is Levi Strauss at $9mm. Lee is rather meaningful at $4.7mm - though this is only $0.025 (half a percent) per share for parent VF Corp. Skechers' exposure is surprisingly high at $1.9mm ($0.027 ps, or 1.5%), and Jones Apparel Group is about $2.5mm ($0.02 ps or 1.5%).

One of the more notable points is that out of the 30 companies listed as creditors, I've only heard of 8, and my extremely hip interns have only heard of 5. Goody's is not exactly a fashion mecca, but clearly the major vendors saw this coming. It's a shame Wall Street did not see the same.

PS: Note the snapshot from the Goody's website below. The promotional code for the extra 50% discount is TNT (i.e. Boom). Seriously, I'm not making this up.