Domain seeks speedy auction in Bankruptcy Court
Asks for bids to be submitted by Feb. 1
Clint Engel -- Furniture Today, January 23, 2008
NORWOOD, Mass. — Domain Home has asked U.S. Bankruptcy Court to approve a speedy auction of its assets.
The 27-store Top 100 company, which filed for Chapter 11 bankruptcy protection in Delaware Jan. 18, proposed a Feb. 1 deadline for submitting bids followed by a Feb. 5 auction and then approval of a sale Feb. 7.
After consulting with advisors, Domain “concluded that the value maximizing course for their estates is to conduct an expedited auction process simultaneously seeking” bids to operate the retailer as a going concern, and for liquidation.
“Given the immediate nature of this liquidity crisis,” Domain determined it should hold an auction without having a stalking horse bid, the company said.
Doman spent a good part of this decade remaking itself. It was acquired by Aga Foodservice in 2002 and soon began expanding, adding high-end cookers and other Aga products to its stores.
In 2006 it announced a “whole home strategy,” bringing Domain together with Aga and Grange, the high-end French furniture manufacturer in which Aga had acquired a majority stake.
Bankruptcy documents said the plan after the Aga acquisition “was intended to take the idea of ‘lifestyle marketing’ to a new level and expand Domain’s reach from the living, dining and bedroom into the kitchen, the heart of the home.”
However, Aga product sales lagged forecasts, Domain Chairman Gary Nacht said in an affidavit, and Domain “was saddled with the higher store-related and inventory costs. … As a result, margins suffered and the company began experiencing meaningful operating losses.”
More recently the company added a broader mix of designer furniture and accessories, documents said. It began exploring a strategy of updating its East Coast stores while looking for a partner to help take the chain national
That led to the June acquisition of a majority stake in the retailer by Synergy Enterprises, through a holding company. Domain pursued initiatives to restore sales and margins and return the company to profitability. But liquidity issues persisted as lender Wells Fargo cut the company’s borrowing capacity, vendors reduced terms and credit lines, and the economy continued to sink.
Since the filing, Domain CEO Judy George has been charged with the effort to find investors to lead the company out of bankruptcy as a going concern.
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