Prentice completes Levitz purchase
By Larry Thomas -- Furniture Today, January 1, 2006
Woodbury, N.Y. — An affiliate of Prentice Capital Management has completed its purchase of bankrupt Levitz Home Furnishings Inc. and has injected additional capital into the struggling retailer.
Prentice, in partnership with Great American Group, submitted the winning bid of $92.3 million for the retailer's assets at a recently completed bankruptcy court auction.
In a statement, Prentice said the total value of the transaction was "more than $70 million," including the assumption of certain liabilities. A spokesman declined to explain the difference between that estimate and the $92.3 million bid approved by the court.
Prentice also said it had injected $50 million in fresh capital into the retailer, and has agreed to fill all orders from consumers who had placed deposits on new furniture.
Prentice, a New York-based money management firm, said it also has obtained $55 million in financing for Levitz from GE Commercial Finance.
"With the financing ... and a reinvigorated merchandising strategy, Levitz will be in a great position to take advantage of its strengths as one of the most recognizable brand names in America while providing customers with high-quality merchandise and service," said John Duskin, managing director of Prentice.
In a press release announcing the closing of the sale, Duskin acknowledged that Mark Scott, acting president and CEO of Levitz, and other senior managers had left the company.
However, the statement didn't identify their replacements, and a spokesman for the company said Duskin would not comment beyond what was in the release.
"Levitz and Prentice has established a team of skilled and experienced retail and operating experts to assist in leading the company during the initial stages of its turnaround strategy," the release said. "Over the coming weeks and months, the company expects to fortify this new senior management with highly qualified retail executives."
The statement quoted Duskin as thanking Scott and the former management team "for guiding Levitz during the past several months. Their hard work, expertise and leadership have been critical in getting this excellent franchise through its time in Chapter 11."
Levitz filed for bankruptcy protection Oct. 11.
Going forward, the retailer said it plans to concentrate on its profitable New York and West Coast markets. A total of 34 stores will be closed, including all units in the greater Philadelphia and Connecticut markets.
Documents filed in U.S. Bankruptcy Court prior to completion of the sale indicated 35 stores would be closed. However, one location was shut down days before the change in ownership, so it wasn't included in the list distributed by the new owners.
Following the closings, Levitz said it will have 79 stores. The company had 121 units the day it sought bankruptcy protection, including several that were shuttered prior to the sale.
It wasn't immediately clear how many jobs would be lost in the store closings, but Levitz said affected employees would be paid through at least Jan. 31.
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Prentice completes Levitz purchase
Dec 20, 2005
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