Great American to liquidate 32 Jennifer stores
Retailer also will close 8 other stores
Clint Engel -- Furniture Today, July 29, 2010
WOODBURY, N.Y. — Great American Furniture Services' stalking horse bid was the only bid to conduct liquidation sales for the bulk of some 40 stores Jennifer Convertibles plans to close.Jennifer, a Top 100 company, filed for Chapter 11 protection July 18, citing a "lack of liquidity," and indicated plans to close about 40 of its 137 stores in a bid to return to profitability.
The retailer also is seeking court approval for a deal reached prior to the filing, under which Jennifer's largest creditor, Chinese upholstery producer Haining Mengnu, agreed to "convert a large portion of its pre-petition debt" into a 95% common equity stake in the company. Other creditors would hold the remaining 5%.
Great American CEO Jeff Yellen confirmed that the sales will run at 32 of Jennifer's 137 stores for no more than 60 days. He declined additional comment.
Jennifer Chairman and CEO Harley Greenfield has said the retailer will exit the Atlanta, Chicago, Philadelphia and Boston metro markets and the states of Michigan, Florida and North Carolina, where it operates a total of 32 stores.
In a court document, the company also said it plans to close eight other stores in "non-exiting territories."
Under the original GAFS agreement, the liquidators would advance the retailer one month's occupancy costs at the 32 closing locations considered exiting territories, or about $331,700. GAFS also is guaranteeing to pay Jennifer of 75% of the cost value of the merchandise at the stores.
In addition, GAFS would pay a weekly fee for the right to add inventory for the closing sales and would pay a 4% commission on any written sales of that added merchandise.
The sale was expected to begin July 26, but was delayed by court procedures.
In addition to Jennifer convertibles and Jennifer Leather stores, the retailer operates seven Ashley Furniture HomeStores.
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