Wind-Down Sale Starts Immediately In 568 Fashion Bug Locations
BENSALEM. Pa., Sept. 4, 2012 — SB Capital Group, LLC, Tiger Capital Group, LLC, and Great American Group, LLC, announced today the formation of a joint venture to conduct a sale of all inventory in the 568 stores of women’s retailer Fashion Bug, a unit of Charming Shoppes, Inc., a recently acquired subsidiary of Ascena Retail Group, Inc. The “Total Inventory Blowout Sale” will be conducted in the 568 Fashion Bug stores located in communities across 39 states, and is part of Ascena’s planned divestiture of the brand and the orderly wind down of the Fashion Bug operation.
In what will be an epic sale, shoppers will be able to take advantage of the tremendous savings offered at one of the most widely recognized women’s stores in the country. Fashion Bug stores are stocked full of fresh new arrivals with the best in fall fashion, and shoppers will find compelling discounts of as much as 50% on everything in Fashion Bug’s entire $500,000,000 retail inventory. The “Total Inventory Blowout Sale” will reinforce Fashion Bug’s strong, high-value message of “Look Great, Spend Less” and will give women everywhere an unmatched opportunity to build their wardrobes at meaningful discounts off Fashion Bug’s already low original prices.
Fashion Bug offers women’s apparel in plus, misses and juniors sizes, and includes offerings of intimate apparel, accessories, and footwear. Founded as part of Charming Shoppes, Inc., the first Fashion Bug store was opened in the 1960’s in Audubon, New Jersey. The company grew with rapid expansion in the late 1970’s, and reached a peak of more than 1,400 stores in the 1990’s.
As part of the process, Fashion Bug has retained more than 5,900 store and district personnel to assist the joint venture in operating the stores through the completion of the sale process.
About SB Capital Group, LLC
SB Capital Group, a Schottenstein affiliate, is a leader in the field of asset recovery, rescue finance, restructuring and strategic store closing events. As equity stakeholders in businesses comprising sectors as diversified as retail enterprises, consumer products, franchising, licensing and real property, SB Capital Group leverages resources and depth of experience to provide services with applicability across a wide spectrum of industries. Recognized worldwide as a trusted partner for businesses and professionals, SB Capital Group adds value to high level strategic planning as well as day-to-day operations. Our participation in transactions that span the globe has solidified our reputation as one of the most creative and innovative financial service and asset realization firms in existence today. Discover more at www.sbcapitalgroup.com
About Tiger Capital Group, LLC
Tiger Group provides advisory, restructuring, valuation, disposition and auction services within a broad range of retail, wholesale, and industrial sectors. With over 40 years of experience and substantial financial backing, Tiger offers a uniquely nimble combination of expertise, innovation and financial resources to drive results. Tiger’s seasoned professionals help clients identify the underlying value of assets, monitor asset risk factors and, when needed, convert assets to capital in a variety of ways quickly and decisively. Tiger’s collaborative and no-nonsense approach is the foundation for its many long-term ‘partner’ relationships and decades of uninterrupted success. Tiger maintains offices in Boston, Los Angeles, New York and Atlanta. To learn more about Tiger, please visit, www.TigerGroupLLC.com .
About Great American Group, Inc.
Great American Group GAMR 0.00% is a leading provider of asset disposition and auction solutions, advisory and valuation services, capital investment, and real estate advisory services for an extensive array of companies. A trusted strategic partner at every stage of the business lifecycle, Great American Group efficiently deploys resources with sector expertise to assist companies, lenders, capital providers, private equity investors and professional service firms in maximizing the value of their assets. The company has in-depth experience within the retail, industrial, real estate, healthcare, energy and technology industries. The corporate headquarters is located in Woodland Hills, Calif. with additional offices in Atlanta, Boston, Charlotte, N.C., Chicago, Dallas, New York, San Francisco and London. For more information, visit www.greatamerican.com
Montreal’s Hart Stores begin liquidation
Montreal-based mini-department store operator Hart Stores Inc. said Thursday it will begin liquidation sales on Friday as part of its restructuring under the Companies’ Creditors Arrangement Act.
The 32 stores subject to liquidation are Hart, Bargain Giant, and Geant des Aubaines units, including 12 in Quebec, 11 in Newfoundland and Labrador, five in Ontario, two in New Brunswick and two in Nova Scotia. Besides general merchandise, furniture, fixtures and equipment will be offered for sale.
Also, Hart has obtained Quebec Superior Court approval for an agency agreement with Tiger Capital Group LLC, under which Tiger will conduct the liquidation sales at the 32 stores. RSM Richter is the court-appointed Hart Stores monitor.
Hart operates 92 mid-size department stores in secondary and tertiary markets throughout Eastern Canada.
Borders to Begin Liquidating on Friday
The Borders Group prepared to enter its final chapter — liquidation — on Friday after a federal bankruptcy judge approved its plan to wind down its remaining stores.
The Borders store closings will be run by a group led by Hilco and the Gordon Brothers Group and that also includes the Great American Group, the SB Capital Group and the Tiger Capital Group.
The liquidators will offer discounts of up to 40 percent. Should customers be more interested in shelving and coffee machines instead of books and CDs, the store fixtures can also be bought.
“This marks the end of an era and we thank our customers for their patronage over our 40-year history,” Mike Edwards, president of Borders, said in a statement. “I encourage our customers to take advantage of this one-time opportunity to find exceptional discounts on their favorite books and other great merchandise.”
Borders is seeking court approval to sell 30 stores to a smaller rival, Books-A-Million. That must first be approved by bookstore chain’s official unsecured creditors committee.
The liquidation of Borders, which began 40 years ago as a used bookstore in Michigan, is expected to run through September.
Metropark USA Wins Court Approval Of Store-Closing Deal
Metropark USA Inc. won court approval of a deal under which two liquidators will host going-out-of-business sales at its 69 apparel retail stores, court papers show.
Judge Robert D. Drain of the U.S. Bankruptcy Court in White Plains, N.Y., on Friday signed off the deal with Gordon Brothers Retail Partners LLC and Hilco Merchant Resources LLC, which together emerged the winner from an auction last week at which the liquidators started off as rivals.
At the auction, held May 3, bidding started with a leading offer from liquidation firms SB Capital Group LLC and Tiger Capital Group LLC. The two had guaranteed Metropark 55% of the proceeds raised from the sale of its inventory.
After Hilco and Gordon Brothers faced off for several rounds of bidding, the two decided to team up. Their bid guaranteed Metropark 70% of the inventory sale proceeds as well as $150,000 with respect to the sale of the company’s furniture, fixtures and equipment located at the stores.
Both Metropark and lender Wells Fargo Retail Finance, owed about $2.5 million, were present at last week’s auction and accepted the bid as the highest and best received.
As the leading bidder, SB Capital and Tiger will share in a $50,000 breakup fee.
Visitors to Metropark’s website Monday were greeted with the news at all merchandise at its 69 stores in 21 states was on sale at discounted prices.
The Los Angeles retail chain sought Chapter 11 protection May 2 and quickly sought approval to move ahead with liquidation, lacking the cash it needed to continue operating.
Metropark USA had said it would accept bids that would keep its stores open, but no going-concern bidders put forth an offer at last week’s auction.
The retailer opened its first stores in California in 2004, aiming to appeal to “young tastemaker adults” with its mix of trendy apparel and accessories, DJ performances and art installations.
Icahn Blockbuster Bid Said to Be Joined by…Tiger
Billionaire Carl Icahn’s offer for Blockbuster Inc. has attracted a second group of liquidators, Great American Group Inc. and Tiger Capital Group LLC, to join his auction bid for the bankrupt movie-rental company, two people familiar with the matter said.
The liquidators face competition from Dish Network Corp. and SK Telecom Co., according to another person familiar with the case. The companies participated in closed-door bidding yesterday at U.S. Bankruptcy Court in Manhattan. Another group of liquidators, Gordon Brothers Group LLC and Hilco Merchant Resources LLC, are also bidding on the company, the person said
Eight hours of closed-door bidding in U.S. Bankruptcy Court in Manhattan yesterday was closed to outside parties, and will resume today with an open auction. The auction was based on a so-called stalking horse offer of $290 million from lenders to the Dallas-based company, including Monarch Alternative Capital LP, which had to be topped by other qualifying bids.
The presence of liquidators at an auction doesn’t necessarily mean the company will end up closing, as liquidators commonly bid for the assets of retailers, said Raniero D’Aversa, a bankruptcy lawyer at Orrick, Herrington & Sutcliff LLP who isn’t involved in the case.
“They always swarm these cases,” D’Aversa said in an e- mail, noting that liquidators might have to offer more money or otherwise make their offer more attractive to be competitive with offers that would keep the company operating.
“Debtors often weigh the bids differently,” D’Aversa said. “A going concern bid may assume some liabilities and contracts that a liquidation bid doesn’t.”
Ron Whittington, a spokesman for Great American, declined to comment. Albert Nassi, a principal at Tiger, and Michael McGrail, a managing director at Tiger, didn’t return calls or e- mails seeking comment. Icahn spokeswoman Susan Gordon declined to immediately comment.
Hilco and Gordon Brothers may seek to liquidate the company or work with Dish or SK Telecom to manage hundreds of Blockbuster store-closure sales as part of a reorganization, said the people, who declined to be identified because the matter isn’t public.
Marc Lumpkin, a spokesman for Dish Communications, declined to comment. SK Telecom Chief Executive Officer Ha Sung-Min didn’t immediately return an e-mail seeking comment.
Michael Freitag, Blockbuster spokesman, declined to comment on the involvement of liquidators or any other aspect of the auction, including how many bidders are involved, and who the bidders are.
Blockbuster has 2,400 U.S. stores as of yesterday, with plans to close another 700 by mid-April, Freitag said.
U.S. Bankruptcy Judge Burton Lifland, who is overseeing Blockbuster’s bankruptcy case, said at a March 10 hearing that the company appeared to be administratively insolvent, or unable to pay its priority claims and the cost of its bankruptcy. Liquidation is an advantage to companies that don’t have enough to pay creditors because it lets them sell merchandise quickly in exchange for cash to satisfy their highest priority creditors.
“A slightly lower going concern bid that will keep employees working could be favored in the debtor’s business judgment over a slightly higher bid from a liquidator, although the secured creditors might fight it,” said Evan Flaschen, chairman of the restructuring group at Bracewell & Giuliani LLP, who isn’t involved in the case.
Hudson Capital Partners LLC and SB Capital Group LLC were also working with Tiger and Great American, one person said. A message left in the general mailboxes for Hudson Capital Partner’s Newton, Massachusetts, office and SB Capital’s New York Office weren’t returned.
The case is In re Blockbuster, 10-14997, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
–Editors: David E. Rovella, Patrick Oster
Movie Gallery Canada is Now Liquidating Merchandise in All of Its 181 Stores in Canada
TORONTO–(BUSINESS WIRE)–Movie Gallery Canada, Inc. (the “Company”) has operated 181 stores under the “Movie Gallery” and “VHQ” banners in all provinces in Canada, with the exception of Quebec. The Company today announces that it will be liquidating inventory and other assets at all of its Movie Gallery and VHQ stores over the next six to eight weeks (the “Sale”). All of its stores are scheduled to close on or before July 31, 2010, with the exact timing of individual store closures to be determined on a store-by-store basis. A list of the closing stores is attached below.
Due to growing challenges in their markets, and other business concerns, the Company elected to file a Notice of Intention to Make a Proposal (“NOI”) pursuant to the Bankruptcy and Insolvency Act (“BIA”) on May 7, 2010. Under the NOI, A. Farber & Partners Inc. (“Farber”), a member of Farber Financial Group, was appointed as Trustee in the Proposal, and has been assisting the Company in this process.
The Company is not bankrupt and intends to file a proposal to its creditors, including landlords and employees, in the near future. The Company’s share of the net proceeds of the Sale will be used to fund this proposal to its creditors. In the meantime, the effect of the NOI and the Order of Ontario Superior Court of Justice dated June 11, 2010 is to provide an overriding stay of proceedings affecting all creditors until July 21, 2010, or thereafter if extended by the Court. The Company continues to occupy its leased premises, and to employ the majority of its valued 1,200 employees.
A joint venture group consisting of: Schottenstein Bernstein Corporation, Tiger Capital Group, and Hudson Capital Partners (the “Agent”) was selected by the Company to conduct the liquidation sale of the Company’s assets, comprising inventory and furniture, fixtures and equipment. This arrangement was approved by the Superior Court of Justice by Order of the Honourable Mr. Justice Campbell on June 11, 2010. The sale in 131 of the 181 store locations was commenced by the Agent on June 12, 2010 pursuant to that Order, affecting inventory valued at approximately $33,000,000.
On June 11th, the Company received offers from parties to acquire some of its remaining 50 stores, including inventory and assets therein. All such offers have been declined, and the Company has now decided to liquidate all 181 of its Canadian stores through its agreement with the Agent. The remaining 50 stores are to be added to the liquidation this week with an additional $15,000,000 of inventory and other assets for sale at significant discounts, including DVD and Blu Ray movies, video games and store fixtures.
“Consumer response to the initial liquidation sale has been excellent,” said David Peress, President of Hudson Capital Partners. “Customers are taking advantage of tremendous bargains on a great selection of movies, videos and games available for purchase at all Movie Gallery and VHQ stores throughout Canada. New product is arriving daily from Movie Gallery’s Canadian warehouse. All Company gift cards will continue to be honored during the Sale.”
Management, in concert with its advisors and Farber, intends to work as expeditiously as possible to maximize the outcome for the benefit of all stakeholders.
More information about the NOI process can be obtained by visiting Farber’s website at www.farberfinancial.com and clicking on the Movie Gallery Canada, Inc. link under Current Engagements.
About Farber Financial Group
Farber Financial Group (www.farberfinancial.com) provides specialty financial services for rescuing, refinancing and rebuilding businesses, including: corporate insolvency and restructuring, forensic accounting, fraud investigations, distressed financial advisory services, corporate finance, mergers & acquisitions, business strategy & valuations, turnarounds, CFO interim management and opportunity assessments. Farber is based in Toronto, Canada and is internationally a member of Begbies Global Network (www.begbiesgn.com).
About Schottenstein Bernstein Corporation
SB Capital Group, a Schottenstein affiliate, is a leader in the field of asset recovery, rescue finance, restructurings and store closing / event sales. With a portfolio of businesses and investments across a wide area of sectors including retail, consumer products, franchising, licensing and real property, SB Capital Group’s specialties include asset disposition services, acquisitions, financial solutions, as well as appraisal and valuation services. Please visit www.sbcapitalgroup.com to discover the many ways SB Capital Group helps businesses successfully manage change.
About Tiger Capital Group
Tiger and affiliated companies provide comprehensive advisory, valuation, auction, management, and disposition services for a broad range of retail, wholesale, and industrial companies. Over the past 30 years, we have managed more store closings than any other business in the industry and have provided inventory appraisals on behalf of a wide range of industries and merchants. Our focus is to help retailers, asset-based lenders and other financial institutions understand the underlying value of inventory and to provide key monitoring advice. To learn more about Tiger Capital Group, please visit www.tigercapitalgroup.com.
About Hudson Capital Partners, LLC
Hudson Capital Partners, LLC offers an extensive array of professional solutions to the challenges retailers face today, including management of excess, obsolete and discontinued inventory, changing geographic and demographic circumstances, unproductive store sites, and real estate and liquidity issues. The firm’s diversified staff is experienced at performing strategic store closings and relocations, fixed asset dispositions, wholesale inventory buyouts and lease mitigations. Through its advisory arm, HCP Asset Advisors, the firm provides appraisals and asset advisory services. To learn more about Hudson Capital Partners, please visit www.hudsoncpl.com.
Ritz Camera to Close More than 300 Stores Nationwide; Store Closing Sales Scheduled to Begin April 4
WOODLAND HILLS, Calif – Ritz Camera Centers, Inc., the nation`s largest specialty camera and image products and accessories retailer, announced today that it will close more than 300 stores nationwide as part of a court-supervised bankruptcy reorganization. The move will leave approximately 400 Ritz Camera stores still open around the country.
Retail inventory valued at more than $50 million will be liquidated at the stores that are being closed. Store closing sales offering substantial discounts on all inventory at those locations will begin on Saturday, April 4, and are expected to continue until everything is sold to the bare walls.
A joint venture group comprised of Great American Group, LLC, SB Capital Group, LLC, Tiger Capital Group LLC, and Hudson Capital Partners, LLC, will be conducting the sales.
Daniel Platt, senior vice president, capital markets, for Great American Group, said, “Long-time Ritz Camera customers as well as those with any interest in cameras, photography and video-related products will find a tremendous selection of quality, brand-name merchandise at greatly reduced prices. Shoppers looking for distinctive and unique gifts will find these sales particularly appealing, as well.”
Among the thousands of products that will be available at reduced prices are digital cameras and accessories, digital SLR compact cameras, digital frames, binoculars, camcorders and video accessories, and other popular electronic items.
Beginning with a single store in Atlantic City, N.J., in 1918, the Beltsville, Maryland-based privately held chain quickly grew to become the country`s leading supplier of photography products, equipment and services. At one point, after acquiring Wolf Camera, Kits Cameras and a number of other companies, Ritz Camera had over 800 stores in more than 40 states across the country. Financial
troubles, however, caused the company to file for Chapter 11 bankruptcy protection in February, 2009.
Ritz Camera`s downsizing follows efforts over the past year by a number of prominent retailers to deal with slumping sales and the drop in consumer spending brought on by the recession. Major national retailers that have liquidated completely in recent months include Circuit City, Mervyns, Steve & Barry`s, Shoe Pavilion, KB Toys and Linens `N Things.
Circuit City Stores to Close by Sunday
RICHMOND, Virginia — All of Circuit City’s stores will close for good by Sunday, powering down what once was the second-largest U.S. consumer electronics retailer, its liquidators said.
“Consumers reacted to the top-quality product that they had, and the prices we were able to sell it at, and we’re basically running out of inventory a week early,” said Scott Carpenter, vice president for Great American Group, which has been managing Circuit City Stores’ going-out-of-business sales.
After it failed to find a buyer or secure refinancing under bankruptcy protection, Richmond-based Circuit City announced in January that it would liquidate its remaining 567 U.S. stores and lay off about 34,000 employees.
Great American is among four liquidators — the others are SB Capital Group, Tiger Capital Group and Hudson Capital Partners — that have been working since January to sell off Circuit City’s remaining $1.7 billion worth of inventory at reduced prices.
Almost all of it has sold, and nothing will remain when the stores close, Carpenter said.
A small staff will remain at the corporate office after Sunday to finish winding down the company.
Circuit City is guaranteed to receive at least 70% of the proceeds from the liquidation sales, but the final figure may exceed that amount, according to an agreement filed with the U.S. Bankruptcy Court.
Earlier this week, the company announced that telecommunications company Bell Canada is buying a chain of 750 The Source electronics stores across Canada operated by Circuit City’s InterTAN subsidiary. Terms of the sale, which is expected to close in the third quarter, were not disclosed.
Circuit City, which posted losses in seven of its final eight quarters, filed for bankruptcy protection in November as it faced heightened competition, pressure from vendors and waning consumer spending. It reported then that it had $3.4 billion in assets and $2.32 billion in liabilities as of Aug. 31.
Under court protection, it broke 150 leases at locations where it no longer operated stores. Another 155 U.S. Circuit City stores closed in November and December. But the hobbled credit market and consumer worries proved insurmountable.
Fortunoff store-closing sales set for Thursda
New York–A court-ordered liquidation sale will begin this Thursday at all 20 stores operated by bankrupt jewelry and housewares retailer Fortunoff Fine Jewelry and Silverware LLC, the company announced on Wednesday.
Fortunoff’s exit from the retail market comes on the heels of an all-day auction, held on Monday at the company’s attorneys’ offices in New York, in which a group of six liquidators emerged victorious.
The spokeswoman for the liquidators confirmed to National Jeweler that the group comprises Great American Group LLC, Hudson Capital Partners LLC, SB Capital Group LLC, The Gordon Co., Tiger Capital Group LLC and Wilkerson and Associates, which beat out the team of Gordon Brothers Group and Hilco Consumer Capital for the job.
She said Fortunoff’s merchandise is valued at approximately $212 million, and that the liquidators are attempting to work out a plan to allow Fortunoff customers to redeem gift cards during the going-out-of-business sales.
Fortunoff gift cards became a contentious issue in the last few weeks, with various media outlets reporting that Fortunoff was telling customers they could not redeem their gift cards.
“I know that is something they are working out,” she said.
In addition to the merchandise liquidation, Fortunoff has announced that all store fixtures throughout the chain will also be sold.
Fortunoff, which operates stores in New York, New Jersey, Pennsylvania and Connecticut, filed for Chapter 11 bankruptcy protection earlier this month, citing a “severe liquidity crisis” magnified by the grim economic conditions rattling retailers worldwide.
The Fortunoff brand was started in 1922 by the Fortunoff family, which sold a majority stake of the company to investors in 2005.
This is the chain’s second turn in bankruptcy court.
It first filed for Chapter 11 protection in February 2008, only to be purchased by private equity firm NRDC Equity Partners, which owns Lord and Taylor department stores and had plans to integrate the two and pour money into freestanding Fortunoff locations.
Fortunoff, however, struggled to get on its feet in 2008 and watched its problems multiply as the global economic conditions worsened.
Steve & Barry’s stores to be liquidated
NEW YORK, Nov 20 (Reuters) – Steve & Barry’s stores will be liquidated by early 2009 after the new owners concluded they would be unable to obtain financing to keep the casual clothing retailer in business amid disappointing sales.
Steve & Barry’s had filed for bankruptcy protection in July, and in the following month it sold its business to investment firms Bay Harbour Management and York Capital Management for $168 million.
But several affiliates of the new owners filed for Chapter 11 bankruptcy protection in Manhattan on Wednesday, saying in a court filing that Steve and Barry’s revenue had suffered because of the declining health of the U.S. economy and the slump in the retail market.
‘This is the hardest environment in 30 years for retailers,’ said Peter Schaeffer, a partner with restructuring advisor Carl Marks. ‘Chances of companies that have filed for bankruptcy coming out whole is difficult.’
Because of the disappointing sales, the new owners at Steve and Barry’s violated covenants under their senior secured credit facility and have no prospects to obtain financing to keep operating the stores, the filing shows.
‘The appropriate course of action to maximize value for the benefit of all their stakeholders is an orderly liquidation,’ the filing said. The liquidation is scheduled to be completed by the end of this year or early 2009.
The company asked the court for permission to begin store closing sales immediately because Thanksgiving and the crucial Christmas shopping season are rapidly approaching.
RAS Management Advisors LLC is serving as restructuring adviser, and a joint venture of liquidation firms including Great American Group LLC, SB Capital Group, Tiger Capital Group and Hudson Capital Partners will assist in the liquidation, the filing shows.
Steve & Barry’s is known for its apparel lines with celebrity brands that include actress Sarah Jessica Parker, surfer Laird Hamilton and tennis star Venus Williams.
The liquidation of Steve & Barry’s is another blow for malls that are already losing a slew of tenants to bankruptcy liquidations, including home goods retailer Linens ‘n Things and department store Mervyn’s.
‘In 2009, landlords are going to have to get creative to figure out what to do with the enormous amount of empty stores in their inventory,’ Schaeffer said.
(Additional reporting by Jonathan Stempel; Editing by Lisa Von Ahn) Keywords: STEVEANDBARRYS/
Tweeter to shutter remaining stores
Pink, blue, and yellow “Everything on sale” and “Nothing held back” signs plastered on the windows of the Tweeter shop on Boylston Street signal the end of the struggling electronics chain that is preparing to close in the next four to six weeks, according to store employees.
Hudson Capital Partners and Tiger Capital Group are planning to liquidate the merchandise at the company’s 94 stores. Already, Tweeter’s distribution centers and headquarters in Canton are shutting down. Tweeter, which opened its first shop next to Boston University in 1972, will stop its high-end installation services on Nov. 14, said employees at six Massachusetts shops who requested anonymity because they are not authorized to speak on behalf of the company.
The planned liquidation of Tweeter comes just over a year after the company filed for bankruptcy protection with about $165 million in debt. Tweeter’s assets were purchased by the New York investment firm Schultze Asset Management in July 2007 for $38 million and the firm continued to run the chain. But deteriorating economic conditions and stiffening competition undermined attempts to save the electronics retailer, analysts say. According to an Oct. 20 filing in US Bankruptcy Court, Tweeter listed about $40 million in losses.
“They underestimated the difficulty of turning around the business, given the market dynamics,” said Andy Hargreaves, a consumer electronics analyst with Pacific Crest Securities, a technology investment firm in Portland, Ore.
Schultze Asset Management declined to discuss the matter. Hudson Capital Partners in Newton confirmed the liquidation. Tiger Capital Group did not return calls seeking comment.
The final unraveling of Tweeter comes as the electronics industry continues to founder, with Circuit City revealing plans yesterday to close 155 stores (none in Massachusetts) and cut 17 percent of its domestic workforce. Electronics retailers have confronted huge price drops and a slowdown in the flat-panel television business that had helped the industry surge in recent years. Analysts say business is down at least 15 percent this year for some high-end electronics merchants.
It’s a dramatic fall for Tweeter, which had cultivated a reputation in the early years as a mecca for people seeking high-end stereo equipment, from direct-drive turntables to pre-amps to acoustic suspension speakers. Over the past three decades, Tweeter became the go-to retailer for early electronics adopters and those seeking custom, upscale home entertainment systems, earning numerous awards along the way. At one point, Tweeter had more than 150 stores and 2,400 employees in at least 18 states, as well as high-profile naming rights, such as the former Tweeter Center in Mansfield (now renamed Comcast Center).
But Tweeter’s position was weakened as mass merchants like Best Buy and Circuit City focused on installation and customized home entertainment products, and discounters such as Wal-Mart began carrying high-end electronics. In recent years, Tweeter attempted to expand its playground-store concept, which allows potential buyers to see how products work in situations that simulate their homes.
But the strategy was insufficient, analysts say.
Since spring 2007, Tweeter has shuttered more than a third of its stores, leaving it with just over 90 shops, mainly on the East Coast. The chain cut most of its mass marketing efforts this summer in a move to save money. Last month, Tweeter chief executive George Granoff was replaced with an outside restructuring officer.
Already, the clearance sales are underway. A 46-inch, flat-panel LCD television featured in the Boylston Street shop’s window was slashed from $2,899 to $1,688. Inside, however, most of the products were discounted 10 percent, including luxury stereos, GPS navigating systems, and other flat-panel televisions. Analysts expect sales to accelerate when the outside liquidators take control.
The deals were not big enough to lure Vanessa Spilke, a retired Boston resident, inside the store. As she stopped in front of Tweeter’s window on Boylston Street, Spilke explained that she used to shop at Tweeter stores but now does most of her electronics buying online. And these days, she’s doing very little shopping at all.
“The discounts would have to be truly exceptional for us to think it was worth it to buy anything in these tough economic times,” Spilke said. “If it’s not food or clothing, we’re not buying anything – period.”
Globe correspondent Erich Schwartzel contributed to this story.
Shoe Pavilion Wins Approval to Hire Liquidators, Close Stores
Shoe Pavilion Inc., the West Coast shoe retailer, won an emergency bankruptcy court order allowing it to hire liquidators to close all its stores after going-out- of-business sales.
The discount retailer entered bankruptcy in July after five straight quarterly losses and will close its last 64 stores, it said in a statement. Ten to 12 weeks of sales will be run by a joint venture group of Great American Group LLC, SB Capital Group LLC, Tiger Capital Group LLC and Hudson Capital Partners.
“Consumers will benefit from the extreme discounts on every item in the stores until all the merchandise is sold,” Danny Kane, managing member of Tiger Capital Group, said in a statement.
U.S. Bankruptcy Judge Maureen Tighe approved the liquidation order Oct. 17. Gordon Brothers Retail Partners LLC was outbid for the task.
Shoe Pavilion expects the sales to bring in $36.3 million, the company said in court papers. Under a sharing agreement with the liquidators, it is to receive 27.7 percent of the retail price of the liquidated merchandise and 75 percent of the proceeds from sales of furniture, fixtures and equipment
Leaseholders at some of Shoe Pavilion’s locations objected to the liquidation, saying the company was in default under its leases.
Shoe Pavilion, based in Sherman Oaks, California, joined retailers such as Steve & Barry’s LLC, Levitz Furniture Inc. and Sharper Image Corp. in seeking bankruptcy protection as U.S. consumers struggle with falling home values and rising energy costs.
Shoe Pavilion was unchanged at 2 cents in Nasdaq Stock Market trading yesterday.
The case is Shoe Pavilion Inc., 08-14939, U.S. Bankruptcy Court, Central District of California (Woodland Hills)