NEW YORK — The fate of the LF Brands’ spring inventory is finally being determined.

This story first appeared in the January 23, 2004 issue of WWD. Subscribe Today.

According to Rick Darling, president of Li & Fung U.S.A., the U.S. arm of Li + Fung Trading, sourcing agent for the now-defunct LF Brands, some $8 million to $10 million worth of inventory (at landed cost) is headed to Dillard’s, with shipments to begin at the end of the week and run through March. Merchandise will be be shipped through Li & Fung’s distribution center.

Meanwhile, reports were circulating this week that the LF Brands-owned merchandise — which is currently stored in the Laflin, Pa., distribution center — was being looked at by stores such as T.J. Maxx, Ross Stores and other discounters.

Sources said LF Brands and CIT, the firm’s banker, may have already struck a tentative deal with T.J. Maxx for that inventory — some 200,000 to 250,000 garments that initially accounted for several millions dollars in orders.

J. Richard Budd III, chief restructuring officer of LF Brands, didn’t return phone calls seeking comment. A spokeswoman for T.J. Maxx said the company had no comment.

However, sources said there would be a problem shipping the LF Brands-owned merchandise in the distribution center until there is a bankruptcy filing because the landlord of 1412 Broadway here, LF Brands’ former headquarters, has put a lien on the company’s assets. LF Brands owes more than $1 million in back rent.

A bankruptcy filing has not yet occurred.

Meantime, LF Brands employees began receiving their back pay checks this week for work done in December, but business expenses haven’t been reimbursed.

David Mehlman, manager of the Pennsylvania, Ohio and South Jersey joint board of their union, UNITE, said, “Our members in Pennsylvania have started to receive back pay for the hours they worked.”

Several LF Brands employees have been hired by other firms, such as Kellwood Co. and Castle Hill Apparel.