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Retailers Encounter Financial Woes
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Retailers Encounter Financial WoesNevada Bob’s (702-451-3333) received an order of the Court of Queen’s Bench of Alberta, CN under the Canada’s Companies Credit Arrangement Act granting the company protection from its creditors. The company has also sought Chapter 11 bankruptcy protection in the U.S. PriceWaterhouse Coopers Inc. is acting as court-appointed monitor pursuant to the order. The protections have been sought by the company as part of its overall restructuring and revitalization plan, with the consent of its secured lenders.
Wild Oats (303-440-5220) plans to close eight units of the 111-unit chain in an attempt to improve company results. The chain is in the midst of a "repositioning" that includes expanding and remodeling some stores, increasing the variety of products offered and improving customer service. In 1999, the company acquired or merged with 41 stores, and its current financial woes are considered to be related to the difficulty of integrating some of those stores.
General Cinema (617-264-8000) closed an eight-screen theater in Norfolk, VA, and the company’s last operating theater in Houston, TX last month on the heels of filing for Chapter 11 bankruptcy protection to ease its internal reorganization. The movie theater company joins other companies in the industry who recently filed for bankruptcy protection including United Artists Theater Circuit, Edwards Theater Circuit Inc. and Carmike Inc. Oversaturation created by a surge in the construction of megaplexes was blamed for the filing.
Weiner’s Stores (713-688-1331) has filed for Chapter 11 bankruptcy protection for the second time in five years. The Houston-based discount clothier blamed a slowdown in sales for the bankruptcy filing. Needing a cash infusion to stay afloat through the Christmas season, the company filed for bankruptcy protection and asked the court to approve a $35 million emergency loan. The bankruptcy court approved the loan from CIT Group/Business Credit last month. To cut costs, the company will close 44 stores, including 12 of its 43 units operating in the Houston, TX area. The company is closing all of its stores in Little Rock, AR, New Orleans, Shreveport and Baton Rouge, LA. The stores are expected to close by the end of the year. The company’s plan for returning to fiscal health includes concentrating on inner-city neighborhoods that are underserved by other retailers.
Payless Cashways, Inc. (816-347-6630) opened five PCI Builders Resources units amid the closing of 22 existing outlets as the company accelerated its transition to focusing on the needs of professional builders, remodelers, repair contractors, institutional buyers and project-oriented consumers. The closings are anticipated to help in the company’s goal to reduce its debt by $60 million and to become better positioned to attract investors in the future. Stores expected to close include two Dayton, OH-area locations in Miami Township and Huber Heights.
Paul Harris Stores, Inc. (317-293-3900) voluntarily filed for Chapter 11 bankruptcy reorganization and arranged for the sale of most of its wholly owned subsidiary, J. Peterman Company. Three of the company’s other wholly owned subsidiaries, Paul Harris Retailing, Inc., Paul Harris Merchandising, Inc. and Paul Harris Distributing, Inc. also filed for Chapter 11 protection. The company has garnered $45 million of debtor-in-possession financing from LaSalle Bank National Association in connection with the filing. The sale of the J. Peterman assets yielded an immediate $4.3 million.
Video Update (651-222-0006) closed seven of its 16 metroplex video-rental stores, including three in Tarrant County, TX, as the company enters Chapter 11 bankruptcy reorganization. The company listed $129 million in assets and $210 million in debts, and the filing came when the company was unable to remit $6 million in loan payments.
Stern’s (513-579-7780) plans to close two former A&S locations as the result of the difficulties in making the units profitable. The units are located at 33rd Street in New York City, NY and Nanuet Mall in Rockland County, NJ. Both stores are expected to shut their doors by March 2001.
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