Bankruptcy update: Quiksilver, Haggen file Chapter 11

New York -- Two very different retail companies have filed for Chapter 11 bankruptcy protection.



Supermarket retailer Haggen filed for bankruptcy after struggling for months to digest a huge acquisition that has proved troublesome from the start. Surfing and skate apparel chain Quiksilver Inc. also sought protection, a victim of online competition, fast-fashion merchants and teens’ fickle tastes.



Here is more information on both:



Quiksilver: In its filing, Quiksilver requested the court to allow Oaktree Capital Management to provide $175 million in debtor-in-possession financing.



Founded in 1969, the Huntington, California-based Quiksilver operates some 700 retail stores, and also sells its goods in specialty surf and skateboarding shops nationwide. The once high-flying merchant has come down to earth in recent years as fast-fashion giants like Forever 21 and H&M and online retailers lured away its core teen audience.



“After careful consideration, we have taken this difficult but necessary step to secure a bright future for Quiksilver,” stated Quiksilver CEO Pierre Agnes. “With the protections afforded by the bankruptcy code and the financing provided by Oaktree, we will not only be able to satisfy our ongoing obligations to customers, vendors and employees, but we will also have the flexibility needed to complete the turnaround of our U.S. operations and re-establish Quiksilver as the leader in the action sports industry. Our fresh capital structure, with a very low level of debt for our industry, will enable us to invest in and reinvigorate our brands and products. We are confident we will emerge a stronger business, better positioned to grow and prosper into the future.”



The bankruptcy filing affects only Quiksilver’s domestic business and leaves out the European and Asia-Pacific operations, which the company described as remaining strong.



Quiksilver’s sales fell 13% last year, with its net loss widening to $309.4 million.



The company listed total debts of $826 million and assets of $337 million in its bankruptcy filing.



Haggen: Haggen’s bankruptcy filing comes less than a year after the Bellingham, Washington-based grocer acquired 146 stores being divested by Albertsons. At the time, Haggen was a small regional player with only 18 stores.



In its filing, Haggen said it had received as much as $215 million in financing commitments from its existing lenders to keep its operations running.



The company said it has engaged Sagent Advisors to seek buyers for some locations in the five states in which it operates “and to explore market interest for various store locations."



“After careful consideration of all alternatives, the company concluded that a reorganization through the Chapter 11 process is the best way for Haggen to preserve value for all stakeholders. The action we are taking today will allow us to continue to serve our customers and communities while providing Haggen with a process to realign our operations to be positioned for the future," stated CEO John Clougher.