Whitehall Jewelers Inc. (Chicago) has filed for Chapter 11 protection with the U.S. bankruptcy court in Delaware.
The retailer, which operates 373 stores in 39 states under the Whitehall and Lundstrom nameplates, said it had $207 million of assets and $185 million of debts as of May 3, 2008. Whitehall said it lost money and suffered significant negative operating cash flow in each of the last three fiscal years. It said it sought protection from creditors after lenders declared an event of default last week and demanded repayment of amounts borrowed.
The filing comes just two months after Whitehall acquired certain assets of Friedman's Inc., once the third-largest jewelry retailer in the U.S., and Crescent Jewelers for $14.3 million.
According to the court filing, the company, “like many large retailers in this difficult environment, continued to experience significant losses and decreased sales. The general economic downturn and tightening of the credit markets, among other factors, have contributed to a decline in consumer discretionary spending, particularly in the luxury goods sector.”