Discount Retailer To Close Stores
.c The Associated Press
BRENTWOOD, Tenn. (AP) -- Service Merchandise Co. plans to seek Chapter 11 bankruptcy protection, the discount retailer of jewelry and home products announced Tuesday.
The company's board of directors authorized the filing Monday night after five vendors filed a petition seeking court supervision of Service Merchandise's restructuring.
The vendors, including Samsonite and Remington, say Service Merchandise owes them more than $8 million.
The bankruptcy announcement comes five weeks after Service Merchandise said it would close 134 of its 347 stores. Last week, the company said it would also cut the work force at its headquarters in Brentwood, Tenn., and close its Dallas distribution center. The company has not said how many jobs would be affected by all the moves.
Chief executive officer Bettina M. Whyte, a corporate turnaround specialist recruited by Service Merchandise in January, said the company plans to use the Chapter 11 process to transform the company ''into a stronger, more focused and healthier chain.''
''In the interim, we need the support of our vendors, employees and other stakeholders as we work with our secured and unsecured creditors'' under the court-supervised restructuring, she said.
Whyte said employees will be paid without interruption, as will vendors for all new product shipments. The company expects no change in policies regarding returns, exchanges, layaways, product protection plans and gift certificates.
The company also announced that Citicorp is preparing a waiver to allow the company to continue to borrow under its revolving credit line. |
