Furnishings Giant Files Chapter 11
RICHMOND, Va. (AP) _ Home furnishings retailer Heilig-Meyers Co. filed for Chapter 11 bankruptcy protection Wednesday and said it will close 302 furniture stores. About 4,400 jobs will be cut.
The closings will leave the Richmond-based home furnishings chain with 596 stores and about 12,900 employees in 29 states, company spokesman Barry Brockwell said.
The bankruptcy petition lists assets of $1.35 billion and liabilities of $868 million. The company reported a net loss of $15 million for the quarter ended May 31.
``Continued disappointing operating results coupled with an inability to secure alternate financing sources limit our ability to achieve the necessary strategic and capital improvements to compete in today’s retail marketplace,″ Heilig-Meyers president and CEO Donald S. Shaffer said in a news release Wednesday.
In recent weeks, many of Heilig-Meyers’ furniture suppliers either stopped shipping products to the company or required the company to pay cash. Shaffer said he believes manufacturers will work with the company during its reorganization.
Heilig-Meyers also announced that it has received a commitment from a group of lenders for $215 million to help the company through its reorganization. The funding is subject to Bankruptcy Court approval.
Shaffer said bankruptcy protection will enable the company to reduce overhead and focus on operations that have been most profitable, including its 57-store RoomStore division. None of those stores, which are in major markets, will be closed.
In addition to closing unprofitable stores, Heilig-Meyers will shut down distribution centers in Hesperia, Calif., and Thomasville, Ga., Brockwell said.
Heilig-Meyers also will quit offering in-house financing. The company will contract with a third party to handle credit transactions.
The company will seek Bankruptcy Court approval to conduct inventory liquidation sales at the stores that are closing. Brockwell declined to say whether the company has a potential buyer for those stores.
Heilig-Meyers, founded in 1913 in Goldsboro, N.C., grew to a chain of 1,249 stores at its high point in 1998. The company’s stock traded as high as $39 in late 1993. It closed Tuesday at 50 cents, down 6 cents. Trading was halted Wednesday because of the bankruptcy filing.