Z Gallerie Files for Chapter 11 Bankruptcy
Posted on Apr 13, 2009 11:52am PDT
Today, it is being reported that top furniture retailer, Z Galleries, has filed for Chapter 11 bankruptcy. Z Gallerie is a top 100 company and it is reported that
Chapter 11 bankruptcy protection was sought so that the retailer could get out of lease obligations with 21 closed stores and an Atlanta distribution center.
The retailer, which is privately held, said that its remaining stores will stay open and that it will continue to sell its furnishings and home decorative items.
"In light of current economic conditions, our company has had to make some difficult decisions," Chief Financial Officer Mike Zeiden said in a news release. He also claimed that filing and restructuring, "will allow us to eliminate certain lease liabilities from discontinued stores, and to continue to operate and serve our customers well."
The retailer released a list of its 20 largest unsecured creditors, which included a great number of landlords, but no furniture suppliers. It is seeking permission from the court to pay any pre-petition wages and benefits. It would also like permission to honor its existing customer programs, incentives and deposits. All vendors who are in business with Z Gallerie will be paid on an administrative priority basis for all the goods and services the company receives effective today.
At the start of 2009, Z Gallerie closed 21 of its 78 stores. It closed the poorest performing branches with the hopes of maintaining and improving its strongest performing operations. The company wishes to create more manageable stores that carry profitable products.
In 2008, the company grossed $190 million in total revenue, which was down 12% from 2007.
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