Wickes files for Chapter 11
Owes largest industry creditors more than $23 million
Clint Engel -- Furniture Today, February 4, 2008
WHEELING, Ill. — Wickes Furniture has filed for Chapter 11 bankruptcy protection, owing its largest industry creditors more than $23 million.
The Top 100 company listed Simmons Upholstery (Caye Home Furnishings) as its top industry unsecured creditor with two claims totaling about $3.8 million. Also high on the list was DeCoro, with a $2.1 million claim; Klaussner and its JDI division (care of CIT Group), which together are owed $2 million; and BenchCraft, with two claims totaling $1.5 million.
The filing in U.S. Bankruptcy Court in Delaware follows a failed attempt to get enough vendors to accept a proposal to defer payments on past-due debt until July 2009. It also comes on the heels of rapid expansion but poor sales results last year.
In court documents, the company said if filed for protection “in order to obtain the financial flexibility” to pursue a fast transaction, ranging from sale as a going concern, to an investment in the business, to liquidation.
The 43-store Wickes, founded in 1971, had sales of about $396 million last year, according to court documents. The company had $200 million in gross profit and earnings before interest, taxes, depreciation and amortization of about $800,000, the documents said.
Wickes is the second retailer owned by Sun Capital Partners to teeter in recent weeks. Last week, furnituretoday.com reported that Norcross, Ga.-based Nationwide Mattress and Furniture Warehouse, one of Sun Capital’s first industry acquisitions, was preparing to liquidate. The 39-store, promotional retailer hasn’t returned phone calls, but Great American Group — the liquidator that was called in to handle the going-out-of-business sales — confirmed the plan.
In his affidavit, Wickes Senior Vice President and Chief Financial Officer Richard Clausing said the retailer has been highly leveraged from the time of its purchase by Sun Capital in 2004. The document noted that from 2004 through 2006, Wickes was successful with an aggressive expansion plan endorsed by Sun Capital.
But last year, according to the filing, “macroeconomic factors have negatively impacted performance in the mid-tier consumer and the retail furniture industry, including record gas prices, record home foreclosures, and a significant slowdown in the housing market spurred by a national crisis in the subprime lending markets.”
The effects were exacerbated in August and September by a sharp downturn in the housing market, the document said, noting that several of the retailer’s stores are in areas hit by record foreclosures. That led to a significant drop in sales.
Sun Wickes, one of the company’s investor partners, infused the retailer with money through October. Wickes asked for more funds in December but Sun Wickes wanted the vendor deferral program before it would commit, the document said.
Wickes said it was unable to get the level of vendor participation it needed. “As a result, Sun Wickes advised it would no longer fund the debtors’ operations,” the affidavit said.
Wickes operates stores in greater Chicago, Los Angeles, Portland, Ore., and Las Vegas and employees about 1,459 people.
Despite the trials last year, Wickes forged ahead with expansion, opening two stores in a new market Las Vegas in July and November. Later in November, it opened its 19th Chicagoland store in Bolingbrook, Ill., delivering on a plan to open 10 new stores last year.
Wickes President and CEO John Disa could not be reached for comment. A Sun Capital executive hasn’t returned calls.
Here’s the list of Wickes Holdings’ largest furniture industry creditors and their claim amounts, according to bankruptcy documents:
Simmons Upholstery (Caye Upholstery), two claims totaling about $3.8 million.
DeCoro USA, $2.1 million
BenchCraft, two claims totaling $1.5 million
JDI, care of CIT Group, $1.3 million
Legacy Classic Furniture, $1.2 million
Lane Inds., $1.2 million
Broyhill, $1.1 million
Chateau d’Ax, $893,712
ManWah America, $825,491
Sealy, two claims for Sealy in Atlanta and Chicago, totaling $830,685
Klaussner, care of CIT Group, $703,911
Prime Resources International, $657,064
Jonathan Louis International, care of CIT Group, $614,540
Magnussen Home, $550,971
Hilco Merchant Resources, $550,971
Simmons, $450,109
Peters Revington, $424,658
Universal Bedroom, $398,079
American Bedding, $396,658
Master Design, 387,574
Progressive, $385,436
Oak Furniture West, $362,311
Davis International, $315,692
Stainsafe, $314,494
DeFehr Furniture, $312,648
Chromcraft, $312,020
Lifestyle Enterprise, care of CIT Group, $234,630
Tempur-Pedic, $233,895
Jofran, $226,843
Vignettes, $221,965
SLF, $220,383
Check back with www.furnituretoday.com for updates.
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Corp Greed !!!!!! What comes around goes...
- 2008-21-2 07:18:21 -
wicked biache this is for you ,can you say a little bit crazyWOW please go get some help WOW...
- 2008-19-2 13:35:54 -
I Worked, I Earned, I Worked, I Earned, I Worked, IEarned, I worked, Drama!...
- 2008-10-2 18:25:09 -
Well about Wickes of OXNARD true the store manager came from Robinsons May , she was cleaning...
- 2008-10-2 16:16:31 -
What's the fuss about? Why doesnt Wickes just build another location? Or bring in a new line of...
- 2008-9-2 15:09:04
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