NEW YORK -- In a move to stem the flow of red ink, distressed Paul Harris Stores Inc. will shutter the doors of its downtown flagship in Indianapolis on Jan. 5.
Executives at the bankrupt retailer, which filed for Chapter 11 bankruptcy court protection on Oct. 15, were on vacation this week and unavailable for comment. A spokesman for the company said the closure is part of a package of "40 store" sites that have been targeted for closure. The decision to shutter some of its units is part of the chain's efforts to restructure its business and emerge from bankruptcy. It operated 307 units in 28 states at the end of October.
The 18,156-square-foot downtown site at the corner of S. Meridian and Washington Streets -- a high-rent district -- is too big and too pricy for the retailer's needs, according to the spokesman. "We've found that 4,000 square feet is what we really need," he said.
Since about mid-October, less than half of the unit's space -- about 8,000 square feet -- was used by the chain for its Paul Harris operation. Part of the retail space at one time also housed a J. Peterman in-store shop. As reported, Paul Harris bought the J. Peterman business for $10 million in March 1999, while J. Peterman Co. was still in bankruptcy proceedings.
The original J. Peterman catalog and store operation was known for its offbeat, eclectic assortments, nostalgic items from faraway places and vintage styles. The J. Peterman name gained national recognition after being parodied in the TV sitcom "Seinfeld." J. Peterman filed for Chapter 11 in January 1999.
Paul Harris's current tour of bankruptcy court -- the moderately priced chain previously filed for Chapter 11 in February 1991 and emerged in August 1992 -- does not include any J. Peterman assets. That's because the majority of the J. Peterman assets were sold for $4.3 million prior to the filing. Schottenstein Bernstein Capital Group purchased the intellectual property rights to the J. Peterman name for $700,000.
The spokesman said that the company elected not to close the downtown site until Jan. 5 to give customers time to make holiday returns and exchanges. After the closure, customers can make merchandise returns and exchanges at other Paul Harris stores.
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