Daffy's, the New York area chain specializing in discounted designer labels, filed for bankruptcy protection, Reuters reported yesterday. The filing follows its announcement last month that it would liquidate its 19 stores. According to its chapter 11 filing, Daffy's 30 largest unsecured creditors are owed amounts ranging from $54,000 to $613,000.
Bankruptcy Judge Douglas Tice has agreed to convert the chapter 11 case of RoomStore Inc. to a chapter 7 liquidation, effectively ending the retailer's efforts to remain in business, FurnitureToday.com reported yesterday. The ruling by Judge Tice means that a trustee will soon be appointed to oversee the sale of the company's remaining assets - primarily its 65 percent stake in bedding retailer Mattress Discounters and a distribution center in Rocky Mount, N.C. Yesterday's decision capped a struggle between RoomStore Inc. and its unsecured creditors committee that had become increasingly contentious in recent weeks as the two parties traded accusations of mismanagement in a series of court documents. RoomStore had asked Judge Tice to convert the case to chapter 7, but the committee filed a motion to keep the case in chapter 11 while appointing a trustee to oversee the wind-down of operations.
RoomStore Inc. wants to pull the plug on its chapter 11 case and bring in a trustee to liquidate its remaining assets after sparring with its bankruptcy lender, Dow Jones DBR Small Cap reported today. The defunct furniture chain, which has already sold off its operating assets in a series of going-out-of-business sales, is asking a judge to convert its case to chapter 7 liquidation. Last week, the company received three letters from lender Salus Capital Partners LLC alleging events of default and outlining Salus's plans to take back its collateral, which amounts to substantially all of RoomStore 's remaining assets.
The parent company of Old Country Buffet and other buffet restaurant chains around the country has emerged from a second trip through bankruptcy with fewer restaurants and a much less debt, the St. Paul (Minn.) Pioneer Press reported on Friday. Eagan, Minn.-based Buffets Inc. said that it eliminated $255 million in outstanding pre-petition debt, and closed 140 underperforming restaurants. The reorganized company's stock is now wholly owned by its pre-petition lenders, it said.
Unsecured creditors want control of RoomStore Inc.'s bankruptcy case wrested from the company, alleging that the liquidating furniture retailer used the sales tax it collected from customers to pay its own expenses, Dow Jones DBR Small Cap reported today. The unsecured creditors' committee said that both it and bankruptcy lender Salus Capital Partners LLC "have lost all faith and confidence in the abilities of the board to manage the debtor's remaining affairs," citing a stream of "indiscretions" that the creditors say have plunged the case into chaos. Lender Salus has declared a default under the loan that was keeping RoomStore afloat during its case, according to the creditors, and is poised to simply collect its collateral-the remaining assets of the debtors-and walk away.
Syms Corp. on Friday received a judge's approval to distribute its revamped chapter 11 plan to creditors for a vote, Dow Jones DBR Small Cap. Bankruptcy Judge Kevin J. Carey said that he would sign off on the defunct discount retailer's disclosure statement. The company's plan is to reorganize around its valuable real estate assets, raise $25 million through a rights offering and repay most of its debts in full, thanks to a deal with creditors and equity holders of both Syms and subsidiary Filene's Basement LLC.
Retail sales in the U.S. unexpectedly fell for a third month in June as limited employment gains took a toll on consumers, Bloomberg News reported yesterday. The 0.5 percent drop followed a 0.2 percent decrease in May, Commerce Department figures showed yesterday. The retail figures prompted economists at Morgan Stanley, Goldman Sachs Group Inc. and Credit Suisse to lower their forecasts for economic growth in the second quarter. A cooling job market is sapping the household spending that makes up 70 percent of the economy, curbing sales at retailers such as Target Corp. and Macy’s Inc. For more information on monthly retail sales figures, please see yesterday's ABI Chart of the Day.
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Daffy's, a New York-area off-price chain featuring discounted designer clothing and other name-brand products, said that it was liquidating its 19 stores over the next several months, amid increased competition from bigger rivals, led by T.J. Maxx parent TJX Cos., the Wall Street Journal reported today. Family-run Daffy's, founded in 1961, had annual sales of about $150 million, according to Women's Wear Daily, which reported that the company in June had told its vendors that it wasn't able to pay May invoices. Daffy's, based in Secaucus, N.J., said its 1,300 employees will receive pay and benefits for at least 60 days. Except for one store in Philadelphia, all of its locations are in New York or New Jersey.
Photography retail chain Ritz Camera & Image LLC filed for chapter 11 protection on Friday, less than three years after it emerged from its first bankruptcy, Reuters reported on Friday. The company, which was founded in 1918, was bought in a bankruptcy auction in 2009 by a group led by its top executive. The Beltsville, Md.-based Ritz, which operates nearly 300 stores in 34 states, listed assets and liabilities of between $50 million and $100 million. The case is In re Ritz Camera & Image LLC, U.S. Bankruptcy Court, District of Delaware, No:12-11868.
Abercrombie & Fitch Co. has identified about another 180 stores to close over the next few years as the teen-apparel retailer looks to improve margins in its U.S. stores, The Wall Street Journal reported yesterday. Chief Financial Officer Jonathan Ramsden said Wednesday that these closures are oriented toward the company's A&F and kids brands, although a smaller number of Hollister Co. stores are also being closed. The company, which has already closed 135 stores over the past two years, said store closings are expected to be modestly accretive to earnings on a year-by-year basis. Shares were off 4 percent in late trading Thursday to $31 in recent trading. The stock has fallen 40 percent over the past three months.