The purpose of this study was to investigate the causes of bankruptcy in small apparel stores. Data were collected from 153 apparel retail store owners who experienced failure in small apparel stores in Busan. The results showed as follows; The internal factors that caused bankruptcy in small apparel stores were the problems related with employees, capital, investment, weak marketing strategies, inadequate management, and characteristics of store owners. The external factors were economic condition, unexpected incidents, and the condition of market. There were significant differences in the perception of factors which caused the store bankruptcy according to prior business experience before opening apparel stores, the level of education, and the period between store opening and closing.