chapter 11: March 2009 Archives

M.W. Sewall, the New England company that runs Clipper Marts throughout Maine, has filed for bankruptcy. The company, which dates to 1887, has no plans to close stores while restructuring. M.W. Sewall operates 15 Clipper Marts on the Maine coast and runs an oil-and-propane delivery service as well.

Restaurant chain Tumbleweed filed for bankruptcy protection in Kentucky. The company and its franchisees run 40 restaurants in Kentucky, Indiana, Ohio and overseas. All Tumbleweed Southwestern Grill outlets are continuing to operate during the restructuring.

The economic downturn is hitting local stores especially hard. Saddest among those affected are the decades-old establishments suddenly facing bankruptcy or liquidation. Recent news affects stores with long histories in jewelry, drugs and menswear:

• In Indiana, Chronister Pharmacy is losing its last outlet. This location has been active for 58 years, and has gone from being a family-run business to a division of Kroger. Customers are being directed to Walgreen's.
• Bromberg & Co., a 110-year-old jeweler in Birmingham, Alabama, has closed its 46-year-old retail store in reaction to the economy.
• Midwestern men's retailer Al Baskin has filed for bankruptcy and closed its Mark Shale store. It is keeping three Chicago stores open and closing all of its out-of-state locations in April.
  

Southern grocery chain BI-LO Supermarkets filed for bankruptcy with nearly $1 billion in outstanding debt. The company has 215 stores across the Carolinas, Georgia and Tennessee. BI-LO expects to continue operating during bankruptcy proceedings. BI-LO spinoff Bruno's also filed for bankruptcy earlier this year.

Barnes and Noble may be cutting hours of stores in order to keep doors open, but Borders, about to announce its 4th quarter of '08 numbers, has another plan, to be revealed next week. We're thinking "slash and burn" is the plan. Its stock is trading at 69 cents. It had terrible holiday numbers. And:

Borders also is expected to ask shareholders to approve a reverse stock split at its annual meeting on May 21 to use if necessary to push the share price above $1 and avoid delisting.

Here's a fascinating side effect of bankruptcy filings--we get to learn the semi-interesting names of creditors. From North Carolina:

Raleigh's Carolina Wine Co. left vino lovers across the country with empty glasses when it suddenly shut down this year.

But the company's bankruptcy filing reveals that it had widespread and, in some cases, famous clients.

Those creditors, including the governor, are each owed between "$100 in wine to $47,000."

You may not have expected to see the recession come to Reno and Vegas, and yet! Herbst Gaming will lose control of its 15 casinos in Nevada, Iowa and Missouri in its new bankruptcy filing; the company blames its expensive expansion in the Nevada market in 2007. And extremely troubled Progressive Gaming, which at one time provided gaming systems for casinos, filed for liquidation this week.

The 129 Boater's World stores in 27 U.S. states are being shuttered. Parent company Ritz Camera Centers Inc. (who knew?) filed for bankruptcy protection last month, and is attempting to raise cash by liquidating the boat stores' inventory. The company will also close 400 of its 800 camera stores.

The Greenbrier Resort in West Virginia, host to every U.S. President since Eisenhower, has endured speculation about a purchaser for some time, as it lost $35 million last year alone. The enormous facility—720 rooms! A 40,000-square-foot spa!—filed for bankruptcy last week and, pending approval, will be "bought" by Marriott, and by "bought" they mean that the current owner, railway giant CSX, will pay Marriott $50 million to operate it in exchange for not much more money than that. Unless that deal goes south. (Get it? South?)

The couture design house MGB Squared filed for bankruptcy protection last week in order to keep its business operational. The company designs high-end clothing worn by celebrities and sold at retailers like Saks Fifth Avenue. Industry experts are uncertain that the filing will ensure continuity for the business.

Note: This entry erroneously suggested that MGB Squared designer Eric Gaskins personally filed for bankruptcy, which is inaccurate. Timely Demise regrets any misinterpretation.

Shabby Chic has begun liquidating its eight retail stores. The home goods line had quietly filed chapter 11 bankruptcy in January (so quietly, in fact, that Timely Demise didn't hear about it). A federal judge ordered the stores to liquidate as part of the bankruptcy proceedings. The liquidation does not include the Simply Shabby Chic line sold at Target. (This news will not be taken lightly at Timely Demise HQ, home to several Shabby Chic sheet sets.)

Creator Rachel Ashwell is retaining the rights to the Shabby Chic name and its designs, but it is unclear at this time whether the brand will continue, and in what form.

Popular RV maker Fleetwood filed for Chapter 11 bankruptcy protection and is looking to sell itself. Fleetwood is closing factories and service centers but expects to continue operating during the proceedings. High fuel prices and the recession combined to greatly reduce sales, which led to the bankruptcy filing.

Handbag maker Lambertson Truex has filed for chapter 11 bankruptcy, citing reduced demand. A company executive said high-end spending had slowed, leading to a cash crunch. Lambertson Truex has closed two retail stores, while parent company Samsonite has kept its New York location. Lambertson Truex handbags can cost up to $18,000.

The economic downturn is hitting local stores especially hard. Saddest among those affected are the decades-old establishments suddenly facing bankruptcy or liquidation. Recent news affects regional chains with long histories:

• Cincinnati: luggage store Bankhardt's is closing. The store is 130 years old and has inhabited the same location since 1935. The business owner sold the building and is moving on. Interestingly, three splinter stores with the same name will continue to operate.
• The 16-store jewelry chain Robbins Brothers filed for bankruptcy after struggling during the recession. Robbins Bros' history dates to the 1920s, in Seattle, before moving to California and ultimately expanding to four states.
• In the Pacific Northwest, Joe's Sports and Outdoor is operating during a restructuring. The 30-store chain is owned by a private equity firm that filed as a strategic move. Joe's first opened in 1952 as a military surplus store.

New England retailer Better Bedding is closing more than half its stores as part of a bankruptcy restructuring. The company, which has 21 outlets, is shutting 11 of them and consolidating inventory. Better Bedding cited a 20 percent sales decline as part of the problem. The chain has been in business more than 30 years and is family-owned.

Door manufacturer Masonite announced a bankruptcy filing today. The company, which pioneered the use of special hardwood manufacturing techniques, has been in business since 1924. Masonite is widely used by construction and moving companies. Masonite Inc., which has been privately owned since 2005, reportedly has the financing in place for a successful restructuring.