Chicago-based puzzle and game seller Marbles: The Brain Store has filed for Chapter 11 bankruptcy and wants to close its 37 stores.
Marbles said in its Friday bankruptcy filing that it recognized the likeliest outcome for the bankruptcy reorganization would be liquidation.
The company has five Illinois stores, with locations in Chicago’s Lincoln Square neighborhood, Water Tower Place, Westfield Old Orchard mall in Skokie, Woodfield Mall in Schaumburg and Naperville. A store in Chicago Premium Outlets in Aurora closed at the end of January.
Lindsay Gaskins and Karen Luby — then co-workers at a business incubator in the West Loop — started Marbles with a single kiosk at Woodfield Mall in 2008, banking on demand for toys, games and puzzles that provided a mental workout, not just fun.
The kiosk struggled and closed after three months, but they opened their first retail store in Chicago later that year. In 2012, Gaskins said revenue had been tripling each year, though the company was focusing on growth and not yet profitable.
Florida private equity firm Amzak Capital Management took an equity investment in Marbles in 2014. In January 2016, Amzak said Marbles had taken a $10 million credit facility to refinance debt and support plans for growth, including plans to increase its store count by 20 percent in 2016.
The business eventually expanded to 13 states, with Marbles producing games as well as selling those by other manufacturers.
But Marbles fell behind on rent payments, according to the bankruptcy filing. It considered a restructuring that would have closed just half its stores but decided negotiations with landlords would have been too difficult, the company said in its bankruptcy petition.
Marbles has between $1 and $10 million in assets and between $10 and $50 million in liabilities. Exploding Kittens, littleBits, Mattel and Crazy Aaron Enterprises, makers of Crazy Aaron’s Thinking Putty, are among its largest unsecured creditors, all of which are owed more than $115,000, according to the filing.
The company could not immediately be reached for comment Monday. Marbles is scheduled to appear in court Wednesday to ask to borrow $900,000 from Amzak and to begin conducting store closing sales.
lzumbach@chicagotribune.com
Twitter @laurenzumbach
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