FORGOTTEN WOMAN FILES CHAPTER 11

NEW YORK — After closing nine stores in the past six months, the Forgotten Woman Inc., the large size women’s chain, has filed a Chapter 11 petition seeking to reorganize. However, according to the chain’s attorney, James P. Ricciardi, of Gibson, Dunn & Crutcher, the chain’s remaining 10 stores are operating profitably and no further store closings are planned. He also said the company has bankruptcy court permission to use the cash collateral of its secured lender, GBFC Inc., through April 18.
The attorney said he is hoping to work out a long-term financing deal with GBFC, a unit of Boston-based Gordon Brothers.
In court papers, the chain, based in Long Island City, N.Y., listed liabilities of $5.2 million, including $3.7 million unsecured, and assets of $7.4 million.
Ricciardi said the chain was forced to file Chapter 11 after GBFC decided the leasehold liabilities of the closed stores could be dealt with more effectively in Chapter 11. A suit was filed in a Boston state court seeking the return of its collateral.
Ricciardi said the chain’s financial troubles stemmed from too much expansion into less desirable locations and the lackluster retail environment. The chain, which operates mostly freestanding stores in downtown areas, had sales last year of almost $26 million. Revenues for the current fiscal year are estimated at roughly $18 million.
Largest unsecured creditors include: Tomatsu, based here, owed $204,025; Ellen Tracy, Dallas, $111,478; Stizzoli, here, $73,513; Hino & Malell, Chicago, $72,276; Diane Gilman, here, $68,074, and HMS Productions, here, $52,844. — Fairchild News Service

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