Mark Shale is the latest independent retailer to succumb to the recession.
On Monday, the upscale men’s wear chain filed for Chapter 11 protection in a Chicago bankruptcy court under the name of its parent Al Baskin Co.
The eight-unit retailer will close five of its stores — Dallas, Kansas City, St. Louis, Atlanta and an outlet in Chicago — and conduct store-closing sales while it seeks a buyer for the remaining units in Chicago, as well as its Internet business. The company operates a flagship store on Michigan Avenue as well as stores in Oak Brook and Northbrook in Chicago.
“We’re looking for a buyer,” co-president Scott Baskin told WWD Monday. “We think it’s a great opportunity for someone. We’re the largest local player in Chicago, have a great brand name, great locations, a great Web site and newly renovated stores. But we need some outside support and our goal is to find someone interested in stepping in.” He said he and his family may or may not be a part of the business going forward if a white knight emerges.
Baskin, grandson of the founder, spent the day phoning vendors and informing them of the situation. The company said it was forced to seek bankruptcy due to a “significant sales decline that began in the fourth quarter of 2008.” Despite cutting expenses and working with landlords to reduce occupancy costs, the firm was unable to survive. “It’s been a tough year for everybody,” Baskin said. “Until the middle of February, we were confident that we had made the cuts we needed to and figured out how to run the business on 30 percent less volume. But in the last three-and-a-half weeks, sales deteriorated even more and that’s when the numbers stopped making sense. It’s a sad day for us and a sad day for the industry.”
This is the company’s second stint in bankruptcy. In November 1995, Mark Shale filed Chapter 11 and closed five of its 13 stores. It emerged from bankruptcy proceedings in 1997.
The Al Baskin Co. was founded in 1929 in Joliet, Ill., and expanded to the Chicago market in the Seventies with the opening of its first Mark Shale store. The retailer currently employs over 380 people, 250 of whom are in the Chicago area.
According to the petition, the company estimated between 200 to 999 creditors, had assets of between $1 million and $10 million and liabilities between $10 million and $50 million.
Among the top five unsecured creditors listed were: 900 North Michigan Ave LLC, Chicago, $346,168; Simon Property Group, Indianapolis, $258,885; Oak Brook Shopping Center, Oak Brook, Ill., $225,328; Zanella, New York, $211,688, and Jack Victor Ltd., Montreal, $173,789.
Others among the top 20 unsecured creditors include Hugo Boss Fashion, New York, $151,114, and Coppley Apparel, Hamilton, Ontario, Canada, $50,669.
Some of the trade creditors listed for both men’s wear and women’s wear, but not among the top 20, include: Seven For All Mankind LLC, Vernon, Calif.; Agave Jean Co., Los Angeles; BCBG Max Azria Group Inc., Vernon, Calif.; Ben Sherman Clothing Inc., New York; Elie Tahari/S Rothschild, New York; Ellen Tracy Dresses, Dayton, N.J.; Fossil/Diesel, Dallas; G III Leather Fashion, Newark; Kenneth Cole Women Outerwear, Secaucus, N.J.; Liz Claiborne, New York; Loro Piana SpA, Corso, Rolandi, Italy; Nicole Miller, New York; Oxford Industries, Chicago; Peerless Clothing International, Saint Albans, Vt.; Salant Holding Corp., Atlanta; Supreme International, Atlanta, and Vince, Chicago.
Two of the trade creditors, Hart Schaffner & Marx and Hickey Freeman, are part of Hartmarx, which itself filed Chapter 11 earlier this year.
Among the factors who are creditors include: Capital Factors; CIT Commercial Services Inc.; GMAC Commercial Credit; Hildun Corp.; IDB Factors; Milberg Factors Inc.; Rosenthal & Rosenthal and Sterling Factors.
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