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ABC Carpet & Home files Chapter 11 bankruptcy petition in US court
13 Sep '21
2 min read
Pic: ABC Carpet & Homes
US luxury home goods retailer ABC Carpet & Home recently filed for bankruptcy, with a group of investors making a binding bid for the company. The more-than-a-hundred-year-old company sought Chapter 11 protection in the US bankruptcy court in the Southern District of New York after it was unable to pay its bills.
It listed assets of up to $50 million, and as much as $100 million of liabilities, in its petition.
The retailer’s lender, 888 Capital Partners, a group of investors involved in the consumer products and home furnishings industries, agreed to lend ABC $5.7 million to pay vendors, suppliers and employees and fund the bankruptcy process, according to court documents.
The lender also entered into a stalking-horse bid ahead of the company’s bankruptcy auction, which sets the floor for further bids on the retailer. If ABC doesn’t receive any better offers, 888 Capital Partners would take ownership of the business in exchange for forgiving the bankruptcy loan and $8.7 million of pre-bankruptcy debt, Bloomberg reported.
The bankruptcy filing comes after an offer last year from private equity firm MHR Fund Management to acquire ABC fell through in April, according to the newswire. The company was facing a hostile takeover by its lenders last month, after seeing its in-person sales dry up during the coronavirus pandemic.
When the pandemic hit, ABC was developing an online sales platform, which was unprepared for the shift towards online shopping as New York City closed down and affluent locals fled for safer pastures.
From the beginning of this year till July 31, ABC sold about $25.5 million worth of goods, a 50 per cent drop compared to the same period in 2018, the newswire reported.
ABC has had a strong physical retail presence in New York City since its founding in the 1800s, when Samuel Weinrib, an Austrian immigrant, started the business with a pushcart on Manhattan’s Lower East Side, which grew into a high-end shop for affluent New Yorkers.
It listed assets of up to $50 million, and as much as $100 million of liabilities, in its petition.
The retailer’s lender, 888 Capital Partners, a group of investors involved in the consumer products and home furnishings industries, agreed to lend ABC $5.7 million to pay vendors, suppliers and employees and fund the bankruptcy process, according to court documents.
The lender also entered into a stalking-horse bid ahead of the company’s bankruptcy auction, which sets the floor for further bids on the retailer. If ABC doesn’t receive any better offers, 888 Capital Partners would take ownership of the business in exchange for forgiving the bankruptcy loan and $8.7 million of pre-bankruptcy debt, Bloomberg reported.
The bankruptcy filing comes after an offer last year from private equity firm MHR Fund Management to acquire ABC fell through in April, according to the newswire. The company was facing a hostile takeover by its lenders last month, after seeing its in-person sales dry up during the coronavirus pandemic.
When the pandemic hit, ABC was developing an online sales platform, which was unprepared for the shift towards online shopping as New York City closed down and affluent locals fled for safer pastures.
From the beginning of this year till July 31, ABC sold about $25.5 million worth of goods, a 50 per cent drop compared to the same period in 2018, the newswire reported.
ABC has had a strong physical retail presence in New York City since its founding in the 1800s, when Samuel Weinrib, an Austrian immigrant, started the business with a pushcart on Manhattan’s Lower East Side, which grew into a high-end shop for affluent New Yorkers.
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