High-end accessories firm Lambertson Truex on Thursday filed a Chapter 11 petition in a Delaware bankruptcy court, and its exit strategy is a sale of the company.
Giuseppe Bonfiglio, president, said the company has been actively courting potential partners.
“We have been approached by several private equity firms who share our confidence and ability to reorganize and restabilize in the short-term,” he said.
Lambertson Truex was formed 10 years ago and Samsonite Corp. took a majority stake in the firm in 2006. A call to Samsonite seeking comment wasn’t returned. Founders John Truex and Richard Lambertson are still with the firm as creative directors.
Rumblings about a possible filing started in early February. Bankers at the time said one problem that contributed to “liquidity issues” was the quick rollout of stores after Samsonite took control of the firm.
In an affidavit by Maurice Dembsky, Lambertson Truex’s director of finance, the company said it shuttered its Los Angeles and Las Vegas stores around Feb. 25. The New York store on Madison Avenue remains open at Samsonite’s request because it hopes to lease it to another tenant. Until then, Samsonite is paying the rent and real estate taxes for the New York store.
The company’s Web site continues to operate. It said the wholesale business and online operation are profitable.
Dembsky said that due to the extreme downturn in the global economy, even those who used to seek out the “highest quality product” are now in the “shy spending” mode. He also said the company was unable to obtain credit for its wholesale operations.
The company said it has “determined that it will not pursue [debtor-in-possession] financing to sustain its post-petition operations.” With the closure of the two retail stores, the company said it had “determined that it has adequate cash flow to fund itself during the Chapter 11 proceeding pending a sale.”
Samsonite is the top unsecured creditor at $17.9 million. Next are the landlords for the two shuttered stores: $4.7 million for the Los Angeles store at 8457 Melrose Place and $2.5 million for the Las Vegas store at The Shoppes at The Palazzo, which owner General Growth Properties is attempting to sell.
According to the petition, estimated liabilities are $10 million to $50 million and estimated assets are between $1 million and $10 million.