Big M Inc., which operates the Mandee Shops and Annie Sez nameplates, filed for Chapter 11 bankruptcy court protection Sunday night and became the first retailer to file in 2013.
The filing was in a Newark bankruptcy court. The Totowa, N.J.-based firm owes $15 million to unsecured creditors. It also owes $3.2 million to Salus Capital Partners and other secured lenders. The largest unsecured creditor is CIT Group/Commercial Services, owed about $2 million.
WWD first reported on the firm’s financial distress in December 2011, but the company managed to work out arrangements with creditors. Big M has been operating under settlement agreements with creditors since the spring of 2012, but there were still some rumblings about distress in the markets.
Glenn R. Langberg, chief restructuring officer of Big M, said in a statement filed with the bankruptcy court that the firm’s anticipated gross revenue for the year ending Jan. 26 is $192 million. Big M has 1,200 employees, with 490 full-time staffers.
While Big M has been “victimized by an economy that reduced its customers’ disposable income and clothing spending,” like most other retailers, Langberg said the business was “severely impacted” by Hurricane Sandy and its aftermath.
That storm resulted in the “closure of practically all of the debtor’s store locations in the tristate area. The majority of those impacted stores, in addition to the company’s office and distribution center, were unable to open and/or fully operate for over a week,” Langberg said.
The company has a $13.2 million debtor-in-possession facility from Salus, and it intends to restructure its business, as well as consider “all strategic options,” Langberg said.
Big M was founded in 1948 by the Mandelbaum family, and remains a privately held family-owned business.
Ken M. Mandelbaum, Big M’s former chairman and chief executive officer, retired in September 2011. He was succeeded to the chairmanship by his cousin, Alan Mandelbaum, who was president of Mandee.