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Lenox files for bankruptcy and seeks a buyer
Even century-old retailers aren’t immune to the fragile economy. Longstanding china, giftware and collectibles e-retailer and manufacturer Lenox Group Inc. has filed for Chapter 11 bankruptcy and is a seeking buyer.
Even century-old retailers aren’t immune to the fragile economy. Longstanding china, giftware and collectibles e-retailer and manufacturer Lenox Group Inc. has filed for Chapter 11 bankruptcy in the Southern District of New York and is seeking a buyer.
Lenox says it will sell all its assets to a group of its lenders in exchange for cancellation of some of its secured loans, but that the deal is subject to higher offers.
In conjunction with the filing, Lenox also has requested $85 million in debtor-in-possession financing from its current lender to help it pay operating expenses and employees. The retailer says it plans to “continue to conduct business in the ordinary course without interruption.”
In a statement, the retailer said the down economy and excessive debt led it to seek bankruptcy protection and a sale of its business. Much of that debt was incurred when the original company, formerly called Department 56, purchased fine china manufacturer Lenox in 2005 for $204 million. After the purchase, Department 56 changed its name to Lenox.
“After exhausting all other possibilities and considering the current state of credit markets and the economy, we determined that the best way to complete a restructuring of the balance sheet and protect our franchise value was to pursue a sale of the company under court approval in a Chapter 11 proceeding,” says Lenox CEO Marc Pfefferle. “This process will give the company flexibility to operate on a normalized basis, dispose of unproductive assets, reduce operating costs and strengthen its balance sheet. We expect to proceed quickly through this process and emerge with a new owner to support and grow the valuable brands that have provided quality tabletop, giftware and collectible products to consumers for more than a century."
Lenox is the latest in a string of retailers filing for bankruptcy in 2008. Circuit City Stores Inc. No. 16 in the Internet Retailer Top 500 Guide filed for bankruptcy earlier this month. Other chains seeking bankruptcy protection this year include Boscov’s Department Store LLC, Goody’s Family Clothing Inc., Linens Holding Co., which operates as Linens ’n Things, and Mervyn`s LLC.
Lenox sells its products through wholesale customers who operate gift, specialty and department stores in the United States and Canada, company retail stores, catalogs, direct mail, telemarketing and the Internet.