Byline: Jeff Siegel

NEW YORK--Factors gave vendors the green light to ship to Bradlees on Friday, when the merchandise-starved discounter filed for Chapter 11 protection and secured a $250 million debtor-in-possession financing deal.
The moves should assure Bradlees Inc. of having fully stocked shelves for back-to-school selling in July and August, according to credit analysts. They also indicated that whatever few factors remained on the sidelines last week will fall into line
today, when Bradlees is expected to gain bankruptcy court approval on interim financing of up to $100 million from Chemical Bank.
The announcement of the Chapter 11 and DIP facility confirmed a WWD report on Friday.
Mark A. Cohen, chairman and chief executive officer of the 136-unit Northeastern chain, said the reluctance of factors and vendors to ship merchandise left the company no choice but to seek bankruptcy protection.
The filing had been expected for several weeks. The discounter surprised Wall Street and the credit community June 16 when it reported a loss of $30.8 million--at the high end of the retailer's earlier estimates--in the first quarter, and said it expected the write-off effort to continue into the second quarter.
Bradlees, based in Braintree, Mass., said problems actually started a few years ago when an aggressive expansion and a poor retail environment--shaped by heightened promotions by competitors, unfavorable trends in apparel and unseasonable weather--drained cash reserves. Although Bradlees historically has been a strong apparel discounter, in more recent quarters the quality of the assortments has reportedly declined. Prior to Cohen coming on board in March, the chain was led by Barry Berman, a financial executive. While in Chapter 11, Bradlees said, it intends to refocus its merchandising to emphasize more fashion.
Bradlees' petition listed total liabilities of $721.4 million, including $700.3 million unsecured debt, and assets of $884.8 million.
Jim Rice, a senior retail credit analyst with Bernard Sands Credit, which checks the credit worthiness of retailers for vendors, said Friday that he had begun to advise his clients to ship Bradlees.
Bradlees said Peter Thorner, who guided Ames Department Stores through a successful Chapter 11 reorganization, had been promoted to president and chief operating officer, succeeding Samuel W. Mandell, who resigned. Thorner joined Bradlees as chief financial officer in March. Barry Horwitz, vice president of marketing, also resigned, but a successor has not been named.
Bradlees, which reported a profit of $5.3 million, or 47 cents a share, in the year ended Jan. 28, saw its financial picture decline rapidly through the first quarter as it marked down millions of dollars of inventory. The company was attempting to sell higher quality apparel.
Bradlees' stock, traded on the New York Exchange, did not open for trading Friday.
--Fairchild News Service

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