Z Gallerie files for bankruptcy; to close select stores
Z Gallerie will restructure after filing for Chapter 11 bankruptcy protection.
As part of the restructuring, the home furnishings and décor retailer is seeking court approval to proceed with closing 17 of its 76 stores. It expects the Chapter 11 process to last approximately four months.
In conjunction with the filing and subject to court approval, Z Gallerie expects to have access to a $28 million debtor-in-possession financing facility from its existing secured lender, KeyBank National Association. The DIP financing, which provides up to $8 million in incremental liquidity, combined with the company’s cash from operations, is expected to provide sufficient liquidity to the retailer to maintain normal operations — in store and online — during the Chapter 11 process.
“Z Gallerie has made significant progress on improving all facets of our operations, enhancing our customer service and scaling our E-commerce presence,” said Mark Weinsten, CEO, Z Gallerie. “Upon emergence, we will have a stronger balance sheet and the financial flexibility needed to compete in today’s dynamic retail environment now and for the long term.:
Founded in 1979, Z Gallerie previously filed for Chapter 11 in April 2009 on the heels of a major sales slump. It emerged later that same year after closing some 25 stores.