ICING ASKS CREDITORS TO RESTRUCTURE DEBT

Byline: Rich Wilner

NEW YORK--The Icing Inc., the cash-strapped 100-store apparel and accessory chain based in Enfield, Conn., met with creditors last week in an attempt to restructure its debt.
The chain, which posted a loss of $2 million in the eight weeks ended April 1, offered to pay creditors in cash for shipments going forward in exchange for a moratorium on paying accounts receivable until at least January, according to creditors who attended the meeting.
That offer was reportedly rejected out of hand, and creditors are scheduled to meet again today to further discuss both the retailer's financial condition and their options.
Creditors organized an informal committee and hired Scott Hazen, of Otterbourg, Steindler, Houston & Rosen, as counsel. Hazen refused to comment on the substance of the April 26 meeting.
Privately held, The Icing was formed eight years ago by U.S. Venture Partners, a venture capital firm based in Menlo Park, Calif. Philip Schlein, chairman and chief executive officer of the chain and a general partner in U.S. Venture Partners, did not return phone calls Friday seeking comment on the retailer's attempt to restructure its debt.
Schlein took over the top spot at The Icing on an interim basis in March following the resignation of Stephen Sherman, one of the chain's founders. In addition, Robert Simone resigned in February as president and chief operating officer.
One creditor at last week's meeting with the chain said executives revealed certain operating results, including a shrinkage rate of roughly 8 percent, a level he found surprisingly high.
The preliminary results also showed sales dropped 12.4 percent in the two months ended April 1, to $7.1 million from $8.1 million the prior year. On the same date, accounts payable to the trade nearly doubled to $6.3 million from $3.3 million.
Total current liabilities at April 1 increased 66.8 percent to $11.2 million while assets dipped 4.5 percent to $10.8 million.
Separately, Cygne Designs Inc., the giant private-label apparel manufacturer reported Friday it will take a pretax charge of approximately $1.1 million related to the write-off of accounts receivable "from a customer which is experiencing financial difficulties." While Cygne did not disclose the name of the customer, it was learned that the retailer was The Icing.
The Icing is not the first specialty store effort of 10-year-old U.S. Venture Partners. The group also operates Ross Stores and had run the now- defunct Audrey Jones chain.
Schlein joined USVP in 1985 after serving as president and ceo of Macy's California.
--Fairchild News Service

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