Paul Harris Has a Plan

Paul Harris Stores, Inc. (Indianapolis) announced the submission of a plan of reorganization, with the expectation of emerging from Chapter 11 bankruptcy protection within about 75 days. The plan requires the approval of the retailer's creditors and the Bankruptcy Court.

Under the terms of the plan, Paul Harris would lop 100 stores off its 266-store chain. It has already petitioned Bankruptcy Court approval for the closing and liquidation of the 100 stores.

Glenn Lyon, president and ceo, said, “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 also calls for ownership by new investor as well as existing shareholders, and equity incentives for the management team keyed to specific financial goals.

The company reported that sales for the five-week month ended Feb. 3, 2001, decreased 2.4 percent from a year ago, and same-store sales decreased 9.6 percent. Those figures excluded the marginal performance attributed to the J. Peterman Co. (The company paid $10 million in 1999 to save troubled J. Peterman from impending bankruptcy, but liquidated the retailer/cataloger when it filed for bankruptcy late last year.) For fiscal 2000, total sales decreased 1.4 percent, and same-store sales decreased 2.7 percent.