RTG to get Rhodes stores
Court's OK expected; plans unknown
By Joan Gunin -- Furniture Today, August 29, 2005
Atlanta — Executives involved in the proposed bankruptcy auction sale of remaining Rhodes stores to No. 1 furniture chain Rooms To Go were mum last week, with the deal expected to be finalized Aug. 15 in U.S. bankruptcy court here.
Seffner, Fla.-based Rooms To Go apparently topped The RoomStore in the bidding last week, agreeing to pay about $45.8 million to acquire the assets of an estimated 50 Rhodes stores.
Richmond, Va.-based The RoomStore, which earlier partnered with a liquidation specialist to submit an initial bid of $38.8 million for the stores, is expected to receive a breakup fee totaling $995,000.
Rhodes' unsecured creditors' committee, led by furniture suppliers, had filed an objection with the court stating that a proposed $1.2 million breakup fee was excessive and should be reduced to $500,000.
Rooms To Go, with over 100 stores and 2004 revenues of more than $1.4 billion, previously had objected to certain rules that it said hampered competitive bidding.
Neither attorneys nor management from Rhodes, Rooms To Go or The RoomStore would comment on the proposed acquisition or return phone calls to Furniture/Today late last week.
Rhodes, a primarily midpriced retailer with stores in 12 Southern and Midwest states, filed for Chapter 11 bankruptcy protection in November 2004. It has closed about half its stores and exited a number of markets.
If Rooms To Go acquires the remaining Rhodes stores, the move would take it into new markets, but its plans for the stores were unknown last week.
The RoomStore, the remaining element of the once-No. 1 furniture store Heilig-Meyers, itself emerged from bankruptcy protection earlier this year. It operates 65 stores in Pennsylvania, Maryland, Virginia, the Carolinas and Texas.
