Luggage, consumer gadget and home furnishing retailer Brookstone filed for bankruptcy today, March 3rd. The company had been suffering losses for some some time now and was unable to turn things around. The bankruptcy filings state that the company plans to sell itself to the Spencer’s retail chain for about $147 million.

Brookstone

New Hampsire-based Brookstone’s bankruptcy filing listed up to 5,000 creditors. The filing also estimated liabilities could be as high as $500 million. The company had $1 million in cash as of its Sept. 28th earnings report.

Brookstone was born as a classified ad in Popular Mechanics magazine in 1965, and eventually became a popular retailer selling an eclectic variety of consumer products through its catalogs. The company’s first retail store opened its doors in 1973 and the firm had grown to 260 stores in the U.S. and in Puerto Rico as of year end 2013.

Statement from Brookstone

“The retail industry continues to evolve and staying ahead of the curve is critical,” James M. Speltz, Brookstone’s president and CEO, said in a statement released earlier today. “A partnership with Spencer Spirit provides us the canvas upon which to sketch our next chapter.”

Brookstone brand will continue

Brookstone is betting that a merger with Spencer Spirit Holdings will enable then to operate on a firm economic footing with much lower expenses. The merger agreements states that Brookstone’s stores in malls and airports, as well as its catalog, website and wholesale business, will remain open under the Brookstone brand. Spencer Spirit Holdings agreed to pay $120 million in cash and $7.5 million in new notes, and was assuming $18.5 million in Brookstone liabilities.

Not a done deal yet

Brookstone’s bankruptcy plan has not been approved yet, and there could be at least one major stumbling block. According to a recent report in the Wall Street Journal, Blucora Inc (NASDAQ:BCOR), the owner of the Web-based electronics retailer Monoprice, is also considering making an offer for Brookstone. A competing offer, especially if it involved more cash, would likely throw a monkey wrench in Brookstone’s plans to merge with Spencer Spirit Holdings.