Carol’s Daughter Bankruptcy Shows Importance of a Business Plan

Last week it was reported that “companies affiliated with Carol’s Daughter” had filed for Chapter 11 bankruptcy. Among those companies was CD Stores LLC. The company said that as a result it will close all of its stores with the exception of two in New York. When I broke the news to friends, the general response was “There are Carol’s Daughter stores?”

Yep, there are Carol’s Daughter stores. The only one I’ve ever been is the one located in Pentagon City mall in Arlington, VA. Whenever I go in the store is basically dead, so if all were like that it is no surprise that they did not do well. 

I question though why those in charge at Carol’s Daughter ever thought the company needed retail stores. Aside from being sold online, the brand is also carried in Macy’s and Ulta, and formerly in Sephora. You can also purchase them from Home Shopping Network (HSN) and as of this month, in Target stores.

The deal with Target is most likely what put the coffin inthe retail stores. With those options, who would choose to go to a mall to get the products instead.

Carol’s Daughter competitors such as Miss Jessie’s, Mixed Chicks, and Shea Moisture do not have stores and do just fine. Further, all of them have been in Target and certain other retail stores way longer than Carol’s Daughter. I’m sure some of Carol’s Daughter’s reasoning was originally thought to promote exclusivity of its products, but at this point who cares? Both Miss Jessie’s and Mixed Chicks are at a higher price point and seem to have a more diverse following. The bankruptcy seems to be a lesson in poor planning.

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