Bankruptcy Boom in 2025: What It Means for the Closeout Industry

Steven Beadles • April 1, 2025

Liquidation industry veteran Allen R. Klein weighs in on this year’s retail shakeup — and how it’s creating opportunities in the surplus supply chain.

The first quarter of 2025 has delivered a powerful jolt to the U.S. retail sector. Household names like Forever 21, Joann Fabrics, Big Lots, and Party City have all filed for Chapter 11 bankruptcy, joining a growing list of national chains grappling with slowing foot traffic, bloated inventories, and tightening credit markets.


While these headlines spell trouble for traditional retailers, they’re sparking a different kind of momentum in the closeout and liquidation industry — a sector built to thrive in times of transition.


“This isn’t just a bump in the road,” says Allen R. Klein, president of Allen R. Klein Company. “We’re witnessing a structural shift in retail — and when big players go down, they leave behind massive amounts of merchandise that still has real value in the secondary market.”



Liquidation Surge: What’s Hitting the Market


With each bankruptcy comes a wave of excess inventory — from fashion and footwear to seasonal decorations and crafting supplies. The impact is immediate: liquidators, resellers, and discount retailers are seeing an influx of product that needs to move quickly, affordably, and strategically.

Klein reports that the volume of surplus goods entering the market in Q1 already exceeds what his team handled in the same period last year. Much of it comes from highly desirable categories, including:


  • Branded apparel and accessories
  • Craft supplies and home décor
  • Party goods and holiday merchandise
  • Furniture and general housewares


“We’re seeing truckloads of inventory enter the market weekly,” Klein notes. “Some of it is untouched retail product, some is warehouse overstock, and all of it represents opportunity — if you know how to handle it.”



The Logistics Advantage


Retail bankruptcies don’t just create inventory surpluses — they create logistics challenges. Warehouses fill quickly. Vendors need fast solutions. And timing is everything.

This is where seasoned liquidation partners shine. Firms like Allen R. Klein Company step in to evaluate, acquire, and move product with speed and precision — minimizing loss for sellers while opening up value for secondary buyers.

“It’s not just about buying pallets,” says Klein. “It’s about knowing when and where to step in, how to evaluate the product, and how to match it with the right buyer. That’s where experience makes all the difference.”



A Prime Moment for Resellers


The influx of liquidated goods also creates a compelling opportunity for resellers — whether through online marketplaces, discount retail stores, or international export channels.


But Klein offers a word of advice:


“Start with what you know. Focus on trusted suppliers, and don’t try to be everything to everyone. There’s real profit in closeouts — but only if you know how to buy smart.”



What’s Next: More Disruption on the Horizon


With economic pressures still mounting, many analysts believe the worst isn’t over for retail. Categories like home improvement, mid-tier department stores, and even big-box players could face similar challenges in the months ahead.

“I don’t think we’ve seen the last major bankruptcy this year,” Klein predicts. “And with that, more product will enter the secondary channel. We’re preparing for it — more space, more buyers, more deals.”



Conclusion: Adapt and Thrive


The 2025 bankruptcy wave is disrupting retail — but it’s accelerating growth in the liquidation space. For businesses with excess inventory, and for resellers seeking quality goods, this is a critical moment to connect with trusted partners.

Allen R. Klein Company is ready to help businesses navigate these changes — turning surplus into opportunity and risk into revenue.



📞 Ready to Buy or Move Inventory?


Contact us today to learn how we can help you unlock value in the closeout market.


By Steven Beadles July 16, 2025
Summer 2025 has brought scorching temperatures and early back-to-school resets. In response, retailers across the country are accelerating the liquidation of seasonal merchandise. That’s where the Allen R. Klein Company, a national leader in closeouts and inventory solutions, steps in to help businesses minimize markdowns and protect margins. Timing and strategy have never been more important. Based on Allen R. Klein’s 40-plus years of experience in the industry, he knows historically that if summer goods sit past July, their value can drop by 30 to 50 percent in most channels. Klein is the President of Allen R. Klein Company, a firm specializing in closeouts and liquidation strategies for national retailers. “That’s when we jump in,” says Klein. “Helping clients move product before the markdown spiral begins is where we add the most value.” Retailers Are Running Out the Clock Retailers typically begin summer clearance markdowns in late July or early August. But this year, that schedule has shifted. According to CivicScience, nearly half of U.S. adults began back-to-school shopping by early July — much earlier than in previous years. One major reason is the evolution of the school calendar. Decades ago, most schools across the U.S. began classes after Labor Day. Today, it is standard for grades 1 through 12 to return by mid-August, with many districts starting as early as the second week of the month. This shift has shortened the summer retail window nationwide, leaving retailers with less time to sell through seasonal goods before demand fades. Smart Tactics the Allen R. Klein Company Recommends Bundle Products to Drive Value Bundling slow-moving items like beach towels with sunscreen or flip-flops with tote bags enhances perceived value and helps clear shelf space more efficiently. Research from Lightspeed Commerce shows bundling can increase both average transaction size and sell-through rate.  “If you pair two underperformers into one compelling deal, it’s more likely to move and quickly,” says Klein. Price Deeply and Decisively In the liquidation market, sliding-scale markdowns rarely succeed. Buyers — especially those operating on tight margins and limited shelf space — look for steep, upfront value. Liquidators often require pricing at 70 to 80 percent off wholesale, depending on product dating and resale potential. “Buyers don’t have time to track multiple offers or wait for gradual discounts,” Klein explains. “You have one shot to catch their attention. Price is what gets them to pull the trigger.” Reallocate Inventory Regionally Retailers are increasingly using real-time sales data and weather trends to guide where clearance inventory should be sent. Reports from replenishment platforms like EasyReplenish show that redistributing products by region before mid-summer helps reduce markdown losses significantly. “One-size-fits-all clearance doesn’t work anymore,” Klein adds. “We help clients move the right inventory to the right region at the right time.” A Real-World Approach That Preserves Margin Retailers who act early are seeing stronger results. Allen R. Klein Company has worked with multiple national clients this summer to help them clear seasonal inventory efficiently. In some cases, the majority of product was moved within weeks of markdown launch. “When we start working with clients early in the season and apply smart bundling and pricing strategies, they’re able to preserve significantly more margin and avoid costly warehousing,” Klein says. While each case varies, Klein emphasizes that retailers who prepare in advance for seasonal transitions are better positioned to hit their next sales cycle clean and strong. The Clock Is Ticking Back-to-school shopping is already in high gear. The National Retail Federation projects spending in this category to top $86 billion this year, a 9 percent increase over 2024. That demand shortens the summer sell-through period even further. At the same time, warehouse space remains tight and freight costs continue to rise. Retailers are finding it more expensive to hold onto seasonal goods. Many are recognizing that liquidation is not just a fallback plan but an essential part of inventory strategy. What Sets Allen R. Klein Company Apart Liquidation is a fast-moving, often unpredictable business, and not all players operate on equal footing. What sets Allen R. Klein Company apart is more than just its scale — it’s trust. With over four decades in the industry, Allen R. Klein has built one of the most extensive and reliable buyer networks in the business, spanning national retailers, off-price chains, regional distributors, and international export channels. But it's not just about reach — it's about credibility. “In this business, your word is everything,” says Klein. “There are a lot of shady operators out there. But after 40 years of doing things the right way, buyers know they can trust us.” That trust translates into faster transactions, stronger deal flow, and long-term relationships that benefit both buyers and sellers. Clients don’t just move product — they protect their brand reputation while doing it. Allen R. Klein Company’s Summer Clearance Checklist Start markdowns while demand is still strong Bundle slower-moving SKUs to improve perceived value Use regional data to guide inventory reallocation Work with experienced liquidators to maximize recovery value Final Word “Liquidation for summer isn’t just cleanup,” says Klein. “It’s a strategic opportunity. Execute early, package smart, and time it right.” Retailers who take action now are protecting margins and clearing space for the next sales cycle. Those who delay may be left with deeper markdowns and more risk heading into August. Looking to move seasonal inventory or reduce overstock? Contact the Allen R. Klein Company today and learn how we help businesses across the country turn surplus into opportunity.
By Steven Beadles June 5, 2025
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