PAUL HARRIS SETS CLOSINGS
NEW YORK — Paul Harris Stores Inc. Tuesday filed a reorganization plan in an Indianapolis bankruptcy court that calls for a 100-unit reduction in stores to 166 from 266 and an exit from Chapter 11 in about 75 days.
Paul Harris also reported that sales for the five-week period ended Feb. 3 decreased 2.4 percent, to $11.5 million, versus $11.7 million in the prior-year period, which also excludes $600,000 representing sales attributable to the J. Peterman Co. that Paul Harris sold in 2000. Comparable-store sales were down 9.6 percent. Sales for the quarter ended Feb. 3 dropped 3.4 percent, to $80 million, while comps dipped 0.8 percent.
The store closing should reduce overhead costs by $4.6 million on an annualized basis, but the plan still needs the approval of creditors and the bankruptcy court.
Glenn Lyon, president and chief executive officer, said in a statement: “The reorganization plan provides a platform for continued operations and future growth. It is our path to success. The decision to close additional stores has been very difficult, but is necessary to enable Paul Harris to return to a sound financial position and prepare for a future that is profitable.”
The plan documents weren’t immediately available, but the company said that “ownership in the reorganized company would be divided between new investors+and creditors.” The plan would also provide for equity incentives for the management team keyed to the achievement of specified financial goals.
The retailer is in the midst of lining up financing to enable it to continue operations between now and its exit from bankruptcy.