NEW YORK--The Icing Inc., the cash-strapped accessories and apparel chain that filed a Chapter 11 petition last week, has signed a $5 million financing agreement with GBFC, Boston.
The 100-store retailer was forced to seek court-protected reorganization after vendors balked at extending credit and banks were unwilling to lend money outside of Chapter 11. Its new financing agreement is subject to bankruptcy court approval.
The retailer listed liabilities of $12.9 million, including $11.7 million in unsecured debt, and assets of $20 million in its petition filed in bankruptcy court in Wilmington, Del.
Philip Schlein, chief executive officer, said Wednesday that some store closings are possible but large-scale closings are not likely. Vendors, which had begun halting shipments before the filing, are now looking favorably at shipping to the chain, he added.
The eight-year-old company had asked vendors to accept an eight-month moratorium on accounts receivable. It filed for protection on the eve of a second meeting with creditors. One creditor source said the company learned that creditors had decided to deny the sought-for moratorium at the next day's meeting and filed to gain financing to invigorate its business.
As reported, The Icing lost $2 million in the eight weeks ended April 1 on a 12.4 decline in sales. The downturn in operations was exacerbated by high rents and an expensive distribution system, according to one of the company's creditors.
The largest unsecured creditors are Cygne Designs, owed $927,747; Town & Travel, $318,472; Judith Ann Creations, $238,803, and Silk India, $193,054.
--Fairchild News Service

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