|
|
发表于 2017-3-15 13:58:00
|
显示全部楼层
Retailer Gordmans Hits Chapter 11 Citing Industry Downturn
By Alex Wolf
Law360, New York (March 13, 2017, 6:04 PM EDT) -- Approaching insolvency due to declining sales, 100-year-old department store chain Gordmans Stores Inc. said in a Chapter 11 bankruptcy filing Monday that it is looking to liquidate its assets as soon as possible to avoid further losses as it grapples with over $100 million worth of debt.
Gordmans, a Nebraska-based clothing and apparel retailer with more than 100 stores across the country, initiated bankruptcy proceedings in its home state with an immediate plan to sell off its assets to Tiger Capital Group LLC and Great American Group LLC, calling it the “best available alternative” to other potential transactions.
The public company and affiliated debtors are seeking to expedite Chapter 11 proceedings to obtain competing bids and approve an asset disposition, citing the likelihood of additional losses after comparable store sales for February 2017 declined by $8.8 million, which is more than double what they anticipated.
“With the continued distress of the retail industry, the debtors expect continued weakness in their sales for the foreseeable future,” company Chief Restructuring Officer James B. Brown said in a court filing Monday. “Due to this sales risk and the potential for insolvency in winding down their operations, the debtors seek to accelerate the process for a potential liquidation or other disposition of their assets.”
In explaining the retailer’s economic hardships, Brown pointed to the general trends plaguing the retail industry as a whole, describing a general shift away from brick-and-mortar to online retail channels, a shift in consumer demographics and expensive leases.
“The debtors’ circumstances mirror those of the retail industry in general,” he said. “In recent weeks, numerous retailers have filed for Chapter 11 protection, including HHGregg, The Limited, BCBG Max Azria, and American Apparel. It is likely that other retailers may commence Chapter 11 cases in the near term, as retail is set to replace the troubled oil and gas industry as the most distressed sector this year.”
In a statement Monday, Gordmans CEO Andy Hall said the company would continue to operate as usual without interruption during the sales process.
Gordmans, which began as a small retailer in Omaha in 1915, grew into a chain of department stores over the course of the 20th century, ultimately extending its brick-and-mortar footprint out to 22 states, according to court documents.
Private equity firm Sun Capital Partners purchased all of the company’s outstanding stock in 2008, two years before Gordmans completed an initial public offering. Sun Capital now holds about 49.7 percent of the company’s outstanding shares, Brown said.
According to court filings, Gordmans began taking steps last year to cut its costs by reducing inventory receipts, but its sales losses continued to accelerate as credit tightened across the retail industry. With the help of a financial advisor, the company attempted to negotiate transactions with several parties in the second half of 2016, but saw nothing materialize from its marketing process while its finances continued to deteriorate.
After negotiating with multiple bidders, Gordmans said that it finally determined late last week that a joint bid by Tiger Capital and Great American to liquidate substantially all of the company’s assets “offered the best available alternative given the circumstances.”
In its petition, the retailer cited assets valued at $274 million and total debts around $131 million, including $65.9 million in secured liabilities. The company also noted that it currently employs just over 5,000 employees.
Gordmans is represented by Lisa Peters and Jeffrey T. Wegner of Kutak Rock LLP.
The case is In re: Gordmans Stores Inc. et al., case number 8:17-bk-80304, in the U.S. Bankruptcy Court for the District of Nebraska.
--Editing by Alyssa Miller.
https://www.law360.com/articles/ ... g-industry-downturn
|
|
