CIRO FILES FOR CHAPTER 11, BLAMES FAST EXPANSION IN TOUGH ECONOMY
NEW YORK — Ciro Inc., a specialty retailer of fashion jewelry, filed a Chapter 11 petition here last week, citing a too-swift expansion in the midst of a recessionary environment.
The 132-store chain, operating under the Ciro and Kenneth J. Lane names, blamed its financial woes also on “mismanagement” by several senior officers, who have subsequently been fired or who have resigned.
Jack Levine, past president and chief executive officer, and Abraham Gold, the former chairman, are among the officers charged with bungling the company’s affairs. Neither Gold nor Levine could be reached for comment.
David Ross, Ciro’s executive vice president, said in a statement that the decision to file for bankruptcy protection followed a “protracted but unsuccessful effort to raise needed capital to fund the inventory and operating requirements of the company.”
According to the petition, Ciro has total liabilities of $2.4 million, all but about $100,000 unsecured. Assets come to nearly $5 million.
Also filing separate Chapter 11 petitions were two of Ciro’s subsidiaries, Ciro of Bond Street, listing assets of $12.6 million and liabilities of $15.8 million, and Ciro Creations, listing assets of $652,223 and liabilities of $73,338. All three operations are based in Fort Lauderdale, Fla.
A source said Ciro is in discussions with vendors and a few possible lenders to obtain debtor-in-possession financing, but no agreement had yet been reached.
As part of its restructuring, the company said it expects to downsize and restructure its operations so that it can emerge as a profitable operation. It noted it had been “substantially delinquent” in paying its vendors for several months leading up to the filing and had attempted an out-of-court restructuring, which fell through when it was unable to obtain financing to make the initial payment to an unofficial creditors’ committee.
— Fairchild News Service