Goody's Family Clothing, a retailer of lower priced clothing, filed for Chapter 11 bankruptcy protection this week. To this end, the company will shut down 103 stores (about a quarter of the total) as well as a distribution center. Goody's is located primarily in the southeast and has been around since 1953.
It was back in 2005 that Robert Goodfriend (the son of the founder of Goody's) agreed to a $327 million buyout (the private equity sponsors included Prentice Capital Management and GMM Capital). Unfortunately, since then Goody's has been consistently losing money -- perhaps because of the heavy debt load and competition from the like Wal-Mart (NYSE: WMT). According to the bankruptcy filing, the company has $313 million in assets and $443 million in debt.
Actually, there have been a variety of recent bankrutpcies for retailers, such as Lillian Vernon Corp., Linens 'n Things Inc., Sharper Image and Levitz Furniture Inc. And, as the economy continues to slow down, I'm sure we'll see more.
Tom Taulli is the author of various books, including The Complete M&A Handbook
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Reader Comments (Page 1 of 1)
6-27-2008 @ 9:59PM
Vickie said...
I am assuming the condition of the company has affected employees being paid and in a timely manner as my daughter (minor) has had problems receiving her pay. Could someone please advise on information for her to be able to access pay that is due her?