Gottschalks Bankrupts, Goody’s to Liquidate
Fresno, Calif. Gottschalks announced on Wednesday that it has filed a voluntary petition for reorganization relief under Chapter 11 of the United States Bankruptcy Code.
In related news, Goody’s, which exited Chapter 11 in Oct. 2008, said it will liquidate all 282 stores.
Both retailers are the latest casualties of the economic downturn.
Gottschalks said it will file a variety of first-day motions with the court that, with court approval, will allow the company to continue to conduct business as usual without interruption. In collaboration with its advisors, Gottschalks is considering a sale of its business or other transaction with a third-party investor through a process to be approved by the court in order to attain the highest and best offer from interested parties.
Gottschalks has received a $125 million debtor-in-possession financing package from a group of lenders led by GE Capital.
Jim Famalette, chairman and CEO of Gottschalks, said, “While we have aggressively pursued a number of important steps over the past year to improve our performance and reduce costs, the persistent challenges in the economy and recent unexpected reductions to our borrowing capacity as a result of tightening credit markets have left us with no other recourse than to pursue a sale of the company under court approval in a Chapter 11 proceeding. The DIP financing will provide us with the additional flexibility to operate on a normalized basis as we conduct the sale process. We expect to proceed quickly and hopefully partner with a new owner that will continue to offer branded high-quality merchandise and the special service that we have always provided to our customers.”
Meanwhile, for the Goody’s chain-wide liquidation, Gordon Brothers Retail Partners and Hilco Merchant Resources will conduct the going-out-of-business sales.
Colorep names Anthony to board
RANCHO CUCAMONGA, Calif. Colorep, a leader in sustainable textile solutions, announced that it has named David Anthony to its board of directors.
Larry Levy, Colorep’s chairman and CEO, stated “We are delighted to have David Anthony joining Colorep’s board. He brings extensive experience in building great companies in the clean technology field. I look forward to growing Colorep with David on our team.”
As managing director of 21 Ventures, Anthony sits on the board of Agent Video Intelligence, 3GSolar, BioPetroClean, Juice Wireless, VOIP Logic, WorldWater & Solar Technologies.
Riley named to TWE board of directors
ALBANY, N.Y. Trans World Entertainment announced that Bryant Riley has been appointed to the company’s board of directors. Riley is currently the managing member and founder of Riley Investment Management LLC and founder and chairman of B. Riley & Co., LLC, a Southern California-based brokerage and investment banking firm.
“Bryant Riley brings extensive experience and a history of strong leadership to the company’s board of directors,” commented Robert Higgins, chairman and CEO of Trans World Entertainment.
Riley will fill the vacancy created by the retirement of Marty Hanaka from the board of directors.