Lechters Inc. (Harrison, N.J.) has announced it is closing its 315 housewares stores and going out of business. The fire sale began yesterday.
The company filed for bankruptcy in May, then last month asked a judge to let it sell off assets. Yesterday, it said it couldn't find a buyer. It has said all along that it wouldn't turn a profit without a “significant capital infusion.” According to court papers, it lost more than $7.5 million on $19.1 million in sales in the period from August 5 through September 1 alone.
Lechters had told the bankruptcy judge last month it wanted to close down if it couldn't find an acceptable bidder for its assets. Yesterday, the company said a buyer was identified but the deal couldn't be completed.
“Unfortunately, retail and economic conditions have continued to weaken,” said ceo David Cully, brought in last year from Barnes & Noble to revitalize the chain. “Within this difficult environment, we, very regretfully, have been forced to conclude that an orderly wind-down of the business is in the best interests of Lechters'creditors.”
Once among the leading U.S. kitchenware retailers, the Lechters chain had grown at its height to 325 stores in 36 states and Washington, D.C., under the Lechters Housewares, Super Lechters and Lechters Kitchen Place nameplates. Its off-price stores used the Famous Brands Housewares Outlet banner.
In May, when the retailer filed for bankruptcy, it said it had arranged for $86 million in financing that would allow it to go forward with an extensive renovation program to convert the majority of its stores to a kitchen-based concept called ThinkKitchen. In July, the company said it had received final court approval for the financing and would be able to execute its strategic plan. But a down-turning economy, even before the events of September 11, thwarted its plans.