As noted, we don't normally cover the status of merchant companies, but since we did a piece on Lillian Vernon the other day, this follow-up is in order.
Sharper Image Corp. and Lillian Vernon Corp. both filed for bankruptcy protection as they struggled with declining sales.
Sharper Image will shed 90 of its 184 stores as it deals with a "severe liquidity crisis," Chief Financial Officer Rebecca Roedell said in bankruptcy papers filed yesterday. Closely held Lillian Vernon said it plans to sell assets after revenue trailed its forecasts and costs rose.
Sharper Image blamed its plummeting stock price on a judge's rejection of a $22 million settlement over its Ionic purifiers last year. As analysts began to speculate how much the company might owe plaintiffs, its support from trade vendors and suppliers weakened.
Lillian Vernon, based in Virginia Beach, Virginia, said it hired Gruppo Levey to look into a sale. The company is seeking bankruptcy protection because of lower-than-expected revenue, increased costs and a lack of funding.
The catalog retailer listed assets and debt of $1 million to $100 million in documents filed today in U.S. Bankruptcy Court in Wilmington. The company said it has 5,001 to 10,000 creditors.
Lillian Vernon's parent, Sun Capital Partners, is a private investment firm that specializes in leveraged buyouts. It didn't file for bankruptcy.
Thursday, February 21, 2008
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