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Goody's bankrupt, to close distribution center, three stores in state Tuesday, Jun 10, 2008 By Jason Wiest Arkansas News Bureau LITTLE ROCK - Goody's Family Clothing Inc. has filed voluntary Chapter 11 bankruptcy and will close three Arkansas stores and a distribution center in Russellville, the apparel retailer said Monday. Stores in Conway, Fort Smith and North Little Rock are among 69 underperforming stores to be closed, the privately held company said. Goody's currently has 355 stores in 20 states, with 14 stores in Arkansas. A store in Texarkana, Texas, also will close. Knoxville-based Goody's said it hoped to reduce expenses and create "a more appropriate capital structure" by consolidating distribution centers, which included closing the Russellville facility. Goody's said it expects to receive approval to pay its employees, continue various benefits and honor customer programs like layaway and gift cards. Goody's employs about 10,000 people nationwide. CEO Paul White said he regretted that layoffs were inevitable for an unknown number of employees. "However, we believe these are necessary steps as we work to improve the business and return to profitability," White said. Goody's officials said they decided to file the voluntary petition for reorganization after reviewing "alternatives to address pressures from tightening credit markets, strain on merchandise flow and a sizable but isolated number of underperforming stores in the chain." The company, which was taken private three years ago by two investment firms, has secured a commitment for $210 million in debtor-in-possession financing to supplement its working capital and provide adequate liquidity while reorganizing the business, officials said. |
