Goody’s to File for Chapter 11
Knoxville, Tenn. Goody’s Family Clothing confirmed that it has filed a voluntary petition for reorganization under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware. The company said it is focused on executing a comprehensive corporate restructuring plan and will continue to operate the business without interruption during the reorganization process.
Goody’s has secured a commitment for $210 million in debtor-in-possession (DIP) financing to supplement its working capital and provide adequate liquidity while it works to reorganize the business. This financing includes $175 million in DIP financing under a revolving credit facility from General Electric Capital Corp., $15 million in DIP financing under a term-loan facility from GB Merchant Partners, LLC, and $20 million in DIP financing under a junior term-loan facility from PGDYS Lending LLC.
Paul White, Goody’s recently appointed CEO, stated, ” After careful analysis, we made the decision to restructure the business through a Chapter 11 filing in order to streamline operations, refocus on our core business, and strengthen our balance sheet so that Goody’s is better positioned for the future. Having been in retail for over 30 years, I am excited by the potential at Goody’s and believe that by taking the right actions now, this business can move forward effectively.”
In his statement, White said that Goody’s plans to close 69 underperforming stores, consolidate its distribution centers by closing one facility in Russellville, Ark., significantly reduce expenses, and create a more appropriate capital structure.
Ceo: Wal-Mart needed more in tough economy
BENTONVILLE, Ark. Speaking at Wal-Mart’s annual shareholders meeting, president and ceo Lee Scott said that Wal-Mart would become increasingly more important to its consumers as economic conditions make it tougher to make ends meet.
Citing rising gas prices, food inflation and higher health care costs, Scott said that the challenge to provide for one’s family has become increasingly more difficult.
“During difficult times in the past, Wal-Mart has been there for our customers and our members, said Scott. “But I think we are there for them now more than ever before.”
Scott highlighted examples of how the company was helping people save money, including its CFL light bulbs, which he said will save consumers nearly $6 billion over the life of the product, and its $4 prescription program, saving customers more than $1.1 billion.
With the presidential election looming, some may have expected Scott to give his insight into which candidate would be best, however, the ceo said that Wal-Mart was ready to work with whoever becomes the new President and the next Congress.
Ahold reports U.S. sales growth
AMSTERDAM Ahold reported that first quarter sales at Stop & Shop/Giant-Landover were $5.1 billion, up 1.3% compared with the same period last year. Identical sales were up 1.2% at Stop & Shop (0.2% excluding gasoline net sales) and down 1.5% at Giant-Landover (1.6% excluding gasoline net sales), impacted by lower pharmacy sales.
For the first quarter, net sales at Giant-Carlisle were up 9.2% to $1.4 billion compared with the same period last year. Identical sales were up 5.7% (3.7% excluding gasoline net sales).
Ahold ceo John Rishton said, “In the United States, the roll-out of our Value Improvement Program at Stop & Shop/Giant-Landover remains on track. The price investments related to the roll-out continue to impact margins and sales, with improvements expected later in the year. Giant-Carlisle reported solid sales and margin growth and continues to gain share in a very competitive market. We continue to respond to the turbulent economic environment and its impact on consumer and competitor behavior. We are confident that the actions we are taking to bring value to our customers are the right ones.