Wednesday, April 15, 2009

Z Gallerie Closes stores in USA

Z Gallerie has filed for Chapter 11 bankruptcy reorganization.
The Gardena, Calif.-based retailer filed Friday in the U.S. Bankruptcy Court for the Central District of California in Los Angeles.
It has stores locally in Memorial City Mall, Market Square in The Woodlands, Highland Village and Sugar Land Town Square.
Z Gallerie “filed to reorganize voluntarily under Chapter 11 in order to remove the liability from 22 leases associated with closed stores and an Atlanta distribution center and to strengthen its balance sheet,” the company said in a news release.
Z Gallerie closed 21 stores, mostly in March, and has not announced any more store closings, a company spokesman said in an interview Tuesday.
Z Gallerie stores will be remain open without interruption. The retailer, in the release, said it “has sufficient cash to operate all aspects of its business, including custom furniture orders through its stores and Web site, and is seeking court approval to do so.”
The filing allows Z Gallerie to “eliminate certain lease liabilities from discontinued stores, and to continue to operate and serve our customers well,” Mike Zeiden, chief financial officer and co-founder, said in the news release.
The retailer is seeking court permission to pay pre-filing wages and benefits, honor existing customer programs and deposits and maintain its cash management system.
“Vendors who do business with the company going forward will be paid on an administrative priority basis for all goods and services the company receives after today,” the company said in the release on Friday. “The law prohibits payment for goods and services received before today’s filing.”
Z Gallerie began closing 21 stores nationwide on Feb. 18. Those stores were either poor performers or in markets that the retailer wanted to pull out of, the release said. The company also made arrangements to close its Atlanta distribution center. Now Z Gallerie is supplying merchandise from its central distribution center facility in Gardena.
Founded in 1979, the retailer now has 56 retail locations in 18 states and one outlet at headquarters in Gardena. It employs nearly 900 people.
Turnaround manager Broadway Advisors LLC is advising Z Gallerie. Its bankruptcy counsel is Pachulski Stang Ziehl & Jones LLP. for more information see: www.houstonrealtyadvisors,com or www.houstonrealtyadvisors.net