Retailer seeks bankruptcy protection, cites stormBy EILEEN AJ CONNELLY
The Associated Press | January 08,2013NEW YORK — The owner of Mandee, Annie Sez and Afaze clothing stores cited effects from Superstorm Sandy as it sought Chapter 11 bankruptcy protection Monday.
Big M Inc., of Totowa, N.J., filed the petition in U.S. Bankruptcy Court in New Jersey. It said in an emailed statement it intends to continue to operate its stores and expects to “emerge as a stronger company.”
Court papers, however, state that the company “intends to consider all strategic options to maximize the value of its business and properties,” language often seen as an indicator that a sale of the business is possible.
The family-owned retailer said in the court filing that it started a restructuring process in November 2011, after the economic downturn eroded its business and left it unprofitable. It cut expenses, refinanced debt, renegotiated leases, sold property and closed 27 underperforming stores in 2012.
Court papers said those steps had put it on a path toward profitability when Sandy hit. The storm closed most of its stores in in New Jersey, New York and Connecticut for a week or more, along with its offices and distribution center. Three stores were shuttered for a month and continue to operate on a limited basis.
Big M said that it depleted its resources in getting its stores back into operation, but that business never rebounded. The company also said in the filing that it has not yet collected from its insurance carrier, in part because of a disagreement over the amount owed by Westport Insurance Co., a unit of Swiss Re America Holding Co.
The bankruptcy filing claims the combination of the reduced business and the lack of insurance payments left Big M without the needed cash to operate, especially during the critical holiday period. A representative from Swiss Re did not immediately return a message seeking comment.
Clothing retailers typically take in more than 20 percent of their annual sales during the holiday period, according to the National Retail Federation.
Big M estimated revenue for 12 months ending Jan. 26 will be about $192 million. It reported debt of about $15 million.
The company said it has an offer for up to $13.2 million in credit to see it through the bankruptcy process arranged through Salus Capital Partners, which previously helped finance the 2011 restructuring.
Mandee, an off-price clothing retailer, caters mainly to young women. Annie Sez and Afaze appeal to slightly older female shoppers.
Big M, founded in 1948, operates 129 stores in eight states and employs about 1,200 workers, including roughly 490 full-time employees. About 250 of its staffers are unionized.MORE IN National / World BusinessWASHINGTON — The Congressional Budget Office on Wednesday forecast that the U.S. Full StorySALT LAKE CITY — Federal officials have proposed a two-year ban on rope-swinging from iconic Utah... Full Story
- Most Popular
- Most Emailed
- RICHARD'S POOR ALMANACK: On this day in 410 CE, Visigoths sack Rome and it isn't the first time, either; in 1859, Titusville, Pa., the first commercially viable oil well comes in; in 1918, the only World War I battle fought on U.S. soil in Nogales, Ariz.
- TODAY'S WEATHER MINUTE: Archaelogists uncover artifacts proving that late neolithic Egyptians, pre-dating the Pyramids of Giza, practiced mummification to prepare their dead for the afterlife, far earlier than presupposed.
- TODAY'S WEATHER MINUTE:Chemicals used in hydraulic fracturing that pollute ground water and the air we breathe come under scrutiny by researchers who find at least eight fracking chemicals toxic to mammals.
- TODAY'S WEATHER MINUTE: The craze for Omega-3 fatty acids as a dietary supplement in its most popular form, fish oil, has led to depletion of fish stocks in oceans throughout the world. Is this the beginning of the total collapse of global fisheries?
- TOMORROW'S HEADLINES TODAY: Suspects arrested in Killington bear death, Bryanna Allen and Kevin O'Connor report along the Back to School front, Rutland Plywood site remains an active fire scene as debris continues to smolder.
- TODAY'S WEATHER MINUTE: Forests around Chernobyl, even though dead from massive irradiation after nuclear accident 30 years ago, still have not even begun to decompose, natural balance disrupted at microbial level.