NEW YORK (Reuters) - Goody’s LLC, a privately held family apparel retailer that emerged from bankruptcy in October, has filed for Chapter 11 protection again, and said it plans to liquidate its remaining 282 stores.
A “significant downturn in the national economy caused severe and unexpected financial pressures,” and led to “unexpectedly poor” sales in the holiday season, Goody’s said in a Tuesday filing with the U.S. bankruptcy court in Wilmington, Delaware.
Several retailers have filed for bankruptcy protection in recent months, including Boscov’s Inc, Circuit City Stores Inc and KB Toys Inc.
Retailers are expected to struggle as the weak U.S. economy and rising unemployment cause consumers to reduce spending, and tight credit makes it more costly or impossible for companies to refinance their debts.
Goody’s said it had investigated a number of alternatives, and ultimately concluded that the best way to maximize value for creditors was to conduct an orderly liquidation. It said it hired Gordon Brothers Retail Partners LLC and Hilco Merchant Resources LLC to conduct the liquidation.
The company has between $100 million and $500 million of both assets and liabilities, and between 25,000 and 50,000 creditors, according to its bankruptcy petition. Goody’s filing also covers 13 affiliates.
Founded in 1953 and based in Knoxville, Tennessee, Goody’s had filed for Chapter 11 protection on June 9, 2008, and emerged on October 20 after closing 74 underperforming stores.
It employs about 8,200 people, and operates in 20 U.S. states, mainly in the southeast.
The company said it is owned by PGDYS Lending LLC, which is managed by private equity firm Prentice Capital Management.
The case is In re Goody’s LLC, 09-10124, U.S. Bankruptcy Court, District of Delaware (Wilmington).
Reporting by Jonathan Stempel; Editing by Derek Caney