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11/22/2010

Texas Furniture Chain's Chapter 11 Filing is 18th Retail Bankruptcy in 2010

Lack's Stores, a 36-unit retailer, filed for Chapter 11 bankruptcy protection on November 16 and has begun liquidation proceedings. The Victoria, TX-based company is promoting discounts of 30%-50% on all furniture, accessories, appliances and electronics, and will host store closing sales at its locations over the next six to 10 weeks.

Before 2008, Lack's had about $200 million in annual sales and about 1,200 employees. During the recession, sales dropped 20% and the company had to lay off 300 employees. In its bankruptcy filing, the retailer listed assets and debts both in the $100 million to $500 million range, including some $86 million it owes to lenders providing customer financing. The retailer's largest unsecured industry creditors are owned more than $7.3 million in claims, according to published reports.

The credit-oriented, promotional to mid-priced retailer, which was founded in 1938 and is one of the largest independently owned retail furniture chains in the U.S., has been unable to reach an agreement with its lenders or to find new financing despite improving operations in 2009 and 2010.

The Lack's bankruptcy follows close on the heels of another veteran retailer's filing: apparel retailer Loehmann's sought Chapter 11 protection in U.S. Bankruptcy Court for the Southern District of New York last week. However, Loehmann's was a pre-negotiated bankruptcy, and the retailer will have sufficient resources to fund daily operations. The company expects to emerge from Chapter 11 during the first quarter of 2011.

For related content see: Loehmann's is 17th Major Retail Bankruptcy in 2010
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