PEACE TREATY: There’s a new spirit of cooperation between Bradlees Inc. and the unsecured creditors’ committee and pre-petition banks, led by Bankers Trust.
At a hearing last week, creditors dropped their request for more data and ended their opposition to Bradlees’ new $15 million capital expenditure program. The program, which was reduced from $20 million after creditors protested, will be used to remodel stores and upgrade computer systems, a Bradlees attorney said.
Bradlees filed Chapter 11 last June. The discounter is expected to unveil its 1996 business plan at a meeting with creditors on March 26.
HOUSTON SHUTTLE: Three former executives of Jamesway Corp. have teamed up again with the discounter’s former chief executive officer and chief merchant at Houston-based Weiner’s Stores, which is in Chapter 11.
Herb Douglas left the top job at Jamesway to become president and ceo of Weiner’s in December, and Jerry Feller, formerly the discounter’s senior vice president and general merchandise manager, was named vice president and gmm in January.
Last week, Weiner’s named James L. Berens vice president of stores, succeeding Charles Fritsch, who was named a regional manager. Berens was a vice president and regional manager at Jamesway. Joe Kassa, formerly senior vice president of advertising, marketing and sales promotion at Jamesway, was named vice president of marketing and advertising, an expanded post at Weiner’s. Don Strine, who was advertising director, has left the company.
Jamesway was liquidated this year.
KMART UNLOADS A SITE: Proffitt’s Inc., a Knoxville, Tenn.-based department store, has assumed the lease on an 86,000-square-foot former Kmart at the Barnes Crossing Mall in Tupelo, Miss., and will open a McRae’s unit there in November.
As reported, Kmart holds the lease on about 235 empty stores and continues to make rent payments for those locations.
The new McRae’s will stock only men’s wear and home merchandise, while an existing 100,000-square-foot McRae’s in the mall will showcase cosmetics, women’s and children’s apparel, shoes and accessories after the former Kmart location is renovated and reopened.
FRED’S TOUGH QUARTER: Reflecting a new pricing strategy and a weak retail environment, Fred’s Inc. said fourth-quarter earnings fell 71.6 percent to $784,000, or 8 cents a share, from $2.8 million, or 30 cents, a year ago.
The regional discounter said sales for the three months ended Feb. 3 were up 12.5 percent to $124.1 million from $110.3 million.
“Throughout 1995, we experienced a decline in our gross margins related to the implementation of our new pricing program,” Michael J. Hayes, president and chief executive officer, said in a statement. “It was designed to reposition Fred’s as a price leader in the dollar-store segment.”
Fred’s has agreed to merge with Henderson, S.C.-based Rose’s Stores Inc.
McCRORY’S FUNDING DEAL: McCrory Corp., the general merchandise retailer reorganizing under Chapter 11 since February 1992, has reached an agreement to extend its $100 million debtor-in-possession financing facility through April 30, 1997.
The DIP deal, with The CIT Group/Business Credit Inc., will be supplemented by a $35 million loan from the family members of Meshulam Riklis, chairman and chief executive officer of McCrory.
The Riklis family loan represents a recent $15 million increase over previous levels. The family has also deposited $5 million with CIT as additional collateral. The deals are subject to bankruptcy court approval.
PAYOUT FOR JAMESWAY CREDITORS: With its stores shuttered and nearly all of its assets sold, Jamesway Corp. is likely to pay unsecured creditors between 60 cents and 70 cents on the dollar, sources said Tuesday.
Michael Sherman, executive vice president of special projects, who is heading the liquidation, refused to speculate on a possible payout but said he hoped to finish dismantling the discounter and pay creditors in the fourth quarter.
Secaucus, N.J.-based Jamesway, which filed for Chapter 11 liquidation Oct. 18, ran going-out-of-business sales that raised roughly $139 million, or 55 percent of the value of its inventory. This was supplemented by the sale of fixtures and leases, including 10 to Ames Department Stores.
Sherman said gross receipts will be lowered by expenses such as lease termination expenses and other costs. Shareholders are not expected to receive any payout under a liquidation plan, people close to the case added.
The bankruptcy court has set March 29 as the last date creditors can file claims against Jamesway. An administrative bar date is expected to be set shortly.