Samsonite Company Stores, the U.S. retail division of Samsonite Corp., filed both a Chapter 11 petition for bankruptcy court protection and a prepackaged plan of reorganization on Wednesday in a Delaware bankruptcy court.
The store division, based in Mansfield, Mass., said it expects to exit Chapter 11 in 45 to 90 days. Under the terms of the reorganization plan, creditors would receive 100 percent of their claims. The plan includes cutting Samsonite’s 173-store count by 47 percent and streamlining operations.
Parent company Samsonite Corp. is not a party to the filing.
Donald E. Walden, vice president for finance and chief financial officer of Samsonite’s store division, said in an affidavit filed with the bankruptcy court that U.S. sales in 2008 were $108.1 million, down from $112 million in 2007. As of July 31, the division had assets of $233 million and $1.5 billion in liabilities.
Private equity firm CVC Capital Partners bought Samsonite Corp. in October 2007 for $1.7 billion, including assumed debt, Walden said. He also said macroeconomic factors resulted in a “sudden and dramatic decline in demand for travel-related consumer goods,” affecting the firm’s financial stability.
In June, the parent entity received a $175 million infusion from CVC Capital Partners. The Royal Bank of Scotland, which held about $500 million of Samsonite’s debt, took a minority stake in a debt-for-equity swap, according to sources.
In May, Samsonite sold its Lambertson Truex unit to Tiffany & Co. Lambertson Truex filed for Chapter 11 bankruptcy protection in March, after Samsonite put the brand up for sale in December.
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