(Reuters) - Things Remembered Inc, a U.S. retailer that sells engraved gifts and keepsakes, is preparing to file for bankruptcy protection in the coming days and shutter most of its roughly 400 stores, people familiar with the matter said on Wednesday.
The preparations show how a debt restructuring that Things Remembered underwent in 2016 was not enough to spare it from the wave of bankruptcies sweeping the brick-and-mortar retail sector amid the growing popularity of online shopping.
The Highland Heights, Ohio-based company, which employs roughly 2,500 people in the United States and Canada, is hoping to sell its brand and online business during bankruptcy proceedings, an effort that would potentially preserve hundreds of jobs, one of the sources said. Things Remembered is also seeking buyers for some of its stores, according to the sources.
The closely-held retailer, which has roughly $120 million of debt and faces a cash crunch, is owned by a consortium of investors including private-equity giant KKR & Co Inc (KKR.N). KKR was a lender alongside other financial firms that forgave debt in exchange for ownership of the struggling chain in 2016.
Representatives for Things Remembered and KKR declined to comment.
Things Remembered is preparing severance payments and outplacement services for employees likely to lose jobs when the company closes stores, the sources added.
Things Remembered hired investment bank Miller Buckfire & Co, owned by Stifel Financial Corp, in recent weeks in part to seek buyers for assets, the sources said. Things Remembered has tapped restructuring lawyers at Kirkland & Ellis LLP to prepare its bankruptcy filing, the sources said.
A Stifel representative did not immediately respond to a request for comment, and a Kirkland spokesman had no immediate comment.
Since its debt restructuring in 2016, Things Remembered has installed a new chief executive and focused on boosting its online presence to address the seismic shift of consumers away from physical stores. The company in September launched a presence on Amazon.com Inc’s (AMZN.O) website that offered customers the option to “engrave and embroider items in a matter of clicks.”
Nevertheless, Things Remembered has struggled to compete in the modern era of e-commerce, which has prompted longtime stalwarts such as Toys ‘R’ Us Inc and Sears Holdings Corp to seek bankruptcy protection.
Reporting by Mike Spector and Liana B. Baker in New York; Editing by Leslie Adler