NEW YORK (Reuters) - Goody’s Family Clothing, a privately held apparel retail chain which emerged from bankruptcy in October, plans to liquidate its remaining stores as the U.S. economic recession has undermined its ability to continue operating.
“The company is in the processes of obtaining bids to liquidate substantially all collateral and inventory,” said Cathy Hershcopf, a bankruptcy partner at law firm Cooley Godward Kronish LLP. “The retail environment is very difficult and they did not have sufficient capital to weather the bad times.”
The law firm is acting as a liaison between Goody’s vendors and the company and Prentice Capital Management. PGDYS Lending LLC is Goody’s parent company, and Prentice is the manager of PGDYS.
Bob Carbonell, chief credit officer for retail credit rating service Bernard Sands, confirmed that the company plans to liquidate.
Going-out-of-business sales will begin as early as Friday, said Hershcopf.
When the company emerged from bankruptcy, it operated 287 stores in 20 states.
The Knoxville, Tennessee-based retailer filed for Chapter 11 bankruptcy protection on June 9, hurt by high gasoline and food prices that have forced consumers to cut back on nonessential purchases. It emerged from bankruptcy protection in October after cutting operating costs and closing at least 69 underperforming stores.
Reporting by Chelsea Emery, editing by Matthew Lewis