Kingsport Times News Wednesday, November 26, 2014
Business & Technology

Goody's files for Chapter 11 bankruptcy

January 14th, 2009 12:00 am by Associated Press






CHICAGO — Discount clothing chain Goody’s Family Clothing filed for Chapter 11 bankruptcy protection on Tuesday, the retailer’s second such petition in less than a year as it struggles with mounting debt and a staggering drop-off in sales.


The privately held company, which announced plans this month to liquidate its 282 stores by the end of March, had $202 million in liabilities and $206 million in assets as of Jan. 3, according to documents filed with the U.S. Bankruptcy Court in Delaware.


The Knoxville, Tenn.-based company, owned by PGDYS Lending LLC, said it had an operating loss of $91 million during the past 11 months after $786 million in sales. It has up to 50,000 creditors.


Goody’s first filed for bankruptcy protection in June, saying the move would help it address “pressures from tightening credit markets, strain on merchandise flow and a sizable but isolated number of underperforming stores in the chain.”


As part of its reorganization plan the first time around, the company closed and liquidated dozens of underperforming stores and shuttered a distribution center in Arkansas and a corporate office in New York. It also cut operating and corporate costs, ended its e-commerce business and closed an associated distribution center in Tennessee.


But that proved inadequate as shoppers tightened their belts amid the ongoing recession, causing a downright dismal holiday shopping period for retailers that usually bank on the Christmas spending to boost profits.


Goody’s has about 8,200 employees. Lawyers have said it’s uncertain what will happen to the workers after the liquidation.


 

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