S&K Famous Brands Inc. is about to join Today’s Man Inc. and Kuppenheimer Inc. in the men’s wear retail graveyard.
This story first appeared in the May 21, 2009 issue of WWD. Subscribe Today.
Starting Thursday, going-out-of-business sales will begin at the company’s 105 men’s specialty stores. Gordon Brothers Retail Partners was the highest bidder at an auction Tuesday in Richmond, where the retailer is based, and will conduct the sales. The bankruptcy judge formally confirmed the winning bid on Wednesday.
“Gordon Brothers will be running going-out-of-business sales over the next eight to 10, maybe 12 weeks,” said Jonathan Tibus of the restructuring firm of Alvarez & Marsal, which S&K brought on board to assist the company last July. “Then they’ll be turning off the lights after that.”
Tibus told WWD that with “retail being what it is today,” coupled with the state of the financial markets, it proved impossible for S&K to find a buyer or the financing to continue to operate. He said the company had approached countless banks, equity sources, vendors and insiders for a bailout over several months, but was ultimately unsuccessful. When the company filed for Chapter 11 bankruptcy protection Feb. 9, it had debt of $7.5 million. By April, it had paid off its secured debt by selling its headquarters building and retail store in Glen Allen, Va., and leasing it back. The retailer also sold the inventory from 30 liquidated stores.
Despite these moves, Tibus said, no white knight came forward. “It comes down to the financial market and the bankruptcy rules,” he said. “People are still skittish about retailers. They think once a retailer goes into bankruptcy, it will never get out, so they won’t provide the support. And then they never do come out.”
The liquidation will affect over 750 people at the company’s headquarters, distribution center and stores, Tibus said.
Tibus, installed as chief restructuring officer of S&K following the ouster of Joseph A. Oliver 3rd as chief executive officer in early April, said the company’s trademarks are “still an asset of the estate, and we will be exploring ways to create value” by determining what can be done. He declined to comment on whether the Siegel family, which founded S&K in 1967, was preparing to purchase the name. “I can’t speak for the Siegels,” he said.
Reached at his Richmond office, Stuart Siegel, the former ceo of S&K who assumed an unpaid full-time executive position last month to provide support, said it “wouldn’t be appropriate to comment” on his plans at this time.
S&K was founded by Hip Siegel and his brother-in-law, Abe Kaminsky, and went public in 1983. It is traded over the counter on the pink sheets. Stuart Siegel, Hip’s son, owned 15 percent of the company’s stock.