Bombay Company files Chapter 11
Will keep operating its stores, Web site
Thomas Russell -- Furniture Today, September 20, 2007
FORT WORTH, Texas — After three years of mounting losses, The Bombay Company filed for Chapter 11 bankruptcy protection today.
The filing, in the Fort Worth Division of the U.S. Bankruptcy Court for the Northern District of Texas, covers the Top 100 retailer and its wholly owned subsidiaries including The Bombay Furniture Company, BBA Holdings LLC, Bombay International Inc., Bailey Street Trading Company and BMAJ Inc.
The filing lists assets of $239.4 million and debts of $173.4 million.
It also lists the 40 largest unsecured creditors with claims ranging from $73,005 to $690,823, for a total of $8.3 million. The list included some real estate firms, such as Indianapolis-based Simon Property Group, Chattanooga, Tenn.-based CBL & Associates, and Greensboro, N.C.-based Tanger Properties.
Company officials were not immediately available for comment.
The bankruptcy filing does not affect accent and occasional furniture source Bailey Street Holding Company. That company formed in mid 2005 when Bombay sold the assets of Bailey Street Trading to investors who formed Bailey Street Holding. It continues to show at the Las Vegas and High Point markets.
In a press release this morning, the Bombay Company said the filing was aimed at addressing its financial challenges and identifying a “strategic or financial investor.”
It also announced that it has secured a commitment for a $115 million debtor-in-possession financing facility from General Electric Capital Corp. and GE Canada Finance Holding Co.
“After considering a wide range of alternatives, this course of action was seen as the best route to help preserve our internationally respected brand while working to secure our future,” Bombay CEO David Stewart said in a written statement. “With a tremendous talent pool and an excellent selection of high quality home accessories and furnishings, we are confident that our business will emerge from this process stronger and more competitive. We are very grateful for the dedication and hard work of all our employees and look forward to providing them with a clear road map for success.”
The statement went on to say that the company plans to keep operating its stores and Web sites. The company ended the first quarter with 419 stores after closing a net 22 during the same quarter.
The company also will continue to pay employees wages and salaries and benefits during the proceedings and plans to honor its customer service policies, including returns, exchanges, credits and gift cards and pay “post petition” vendors, suppliers and other business partners for goods and services.
The news falls on the heels of the company’s $52.8 million loss for the year ended Feb. 3 and a loss of $15.4 million for the first quarter ended May 5.
In June, the New York Stock Exchange suspended the company’s stock and moved it to OTC status after shares failed to meet a minimum average closing price of $1 per share threshold over a 30-day trading period.
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