NEW YORK — Wilsons The Leather Experts Inc. has begun store-closing sales at 111 units located in 30 states, liquidating more than $50 million of current inventory.
This story first appeared in the January 28, 2004 issue of WWD. Subscribe Today.
Last week, the troubled Minneapolis-based firm said it expects to take a pretax charge of between $40 million and $50 million in connection with store closures and elimination of more than 1,000 jobs. The charge will impact results for fiscal 2003 and 2004.
The going-out-of-business sales are being conducted by a joint venture team formed by Hilco Merchant Resources, Gordon Bros. Group and Hilco Real Estate. Stores not targeted for closure will conduct business as usual.
“We are executing a business strategy that will further enhance store productivity, supply chain management and cash flow generation,” Wilsons chief executive officer Joel Waller said in a statement Tuesday.
“As a part of this process, we elected to close these underperforming stores. Our decision to outsource our store closings to Hilco Merchant Resources and the Gordon Bros. Group enables our management to focus on the ongoing business.”
The firm said last week it will continue to analyze its merchandise performance and work on establishing an appropriate financial structure.
“We expect the cost-reduction initiative will enable us to reduce our working capital needs and strengthen our business,” Waller said last week. “We are being very aggressive in taking the appropriate actions to move our company forward.”
Michael Keefe, president of Hilco Merchant Resources, noted in Tuesday’s statement, “This sale is an opportunity for consumers to take advantage of tremendous savings in the coldest weather of winter on leather coats, jackets, pants, skirts, handbags and accessories.”
Wilsons last week also had its credit agreement amended to require it to amend, refund, renew, extend or refinance its $30.6 million of 11.3 percent senior notes due in August by April 15. The firm engaged Financo Inc. to assist in developing strategies relating to these notes.