Urbanwear retailer Against All Odds USA Inc. filed for Chapter 11 bankruptcy court protection on Monday, joining the growing procession of stores at risk of dissolution. That same day, Goody’s Family Clothing Inc. decided to liquidate its operations.
This story first appeared in the January 7, 2009 issue of WWD. Subscribe Today.
Against All Odds was founded in 1995 by Kenny Khym. The petition listed Wicked Fashions Inc. of Fort Lee, N.J., as the top unsecured creditor, owed $3.9 million. Wicked is the manufacturer of Southpole, the hip-hop line cofounded by Khym and his brother David and owned by David.
The 64-unit Moonachie, N.J.-based firm filed its voluntary petition in a New Jersey bankruptcy court. It listed assets of between $10 million and $50 million, and liabilities in the same range.
According to an affidavit filed by Hyun Jong “H.J.” Nam, the retailer’s chief financial officer, the operation targeted the more affordable segment of hip-hop apparel. The cfo also identified the specialty chain as the “first mall-based retailer of hip-hop, urban style clothing.” He said hip-hop apparel was estimated as a $2 billion market in 2007.
Against All Odds, which had sales of $15.5 million in 2000, grew to a $78.7 million chain in 2005 and ended 2007 with sales of $121.1 million, the cfo said. Net income fell in 2007, and the retailer sustained a loss in 2008, according to the affidavit. It currently operates stores in eight Eastern and two Western states.
The CIT Group/Commercial Services Inc. is the second top unsecured creditor and is owed $2.1 million.
Meanwhile, Goody’s on Tuesday morning had a meeting to pick a liquidator to oversee going-out-business sales, which sources said could start as early as later this week.
“We were concerned that the company came out of bankruptcy far too quickly into an environment that was extremely hostile for any retailer, and it certainly proved our concerns were correct,” said Bob Carbonell, chief credit officer for credit ratings service Bernard Sands.
“Goody’s came out too early. Over the next 18 months, the amount of retail that will be gone will be overwhelming,” said Stevan Buxbaum, executive vice president of Buxbaum Group, a consumer product appraisal and liquidation firm.