Another model of WS at it's finest
Go public, loot investors, file BK, repeat
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Virginia-based RoomStore may eventually go public
Top 100 furniture chain files with SEC
Clint Engel -- Furniture Today, June 17, 2009
RICHMOND, Va. — The RoomStore here has filed a registration statement with the Securities and Exchange Commission that could eventually lead to public trading of the retailer's stock.
The Top 100 company was once part of the former Heilig-Meyers, which filed for bankruptcy protection in August 2000 and later closed its remaining Heilig stores. The RoomStore was viewed as a salvageable piece of Heilig's business and emerged from bankruptcy in June 2005 as a separate company.
When RoomStore emerged, about 71% of its common stock was held by the Heilig-Meyers Liquidation Trust, set up to liquidate Heilig's assets for creditors. The trust also held a registration rights agreement, which would require RoomStore to register the stock with the SEC at the trust's request.
Brian Bertonneau, outside counsel and corporate secretary for The RoomStore, said the trust asked for the SEC filing and RoomStore complied, initially filing a Form S-1 in April. He said the application hasn't been finalized and that RoomStore and the SEC is now in a comment and revision period that generally takes a few months.
When the SEC finally accepts an amended registration, RoomStore will go from a private stock corporation under Virginia law to a public corporation under state law and will be required to file quarterly and annual reports with the SEC, Bertonneau said.
"But that doesn't mean a market for the stock will develop immediately," he said. "It may take awhile."
He said he couldn't speculate on when RoomStore might become a publicly traded company.
RoomStore of Richmond is No. 26 on Furniture/Today's Top 100 with estimated 2008 sales of $312.6 million at 69 stores in Virginia, Maryland, the Carolinas, Texas, Alabama, Pennsylvania and Florida. That excludes sales from about 70 Mattress Discounters stores in which RoomStore, along with an unnamed investor, acquired a majority stake last year.
According to its initial S-1 statement, RoomStore had sales of about $245.8 million and a net loss of about $11.3 million in the nine-month period ended Nov. 30.
The retailer is not affiliated with The RoomStore of Phoenix, which also is a Top 100 company. |
