Goody's to file for bankruptcy
KNOXVILLE, Tenn. Goody's Family Clothing confirmed that it has filed a voluntary petition for reorganization under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware. The company said it is focused on executing a comprehensive corporate restructuring plan and will continue to operate the business without interruption during the reorganization process.
Goody's has secured a commitment for $210 million in debtor-in-possession (DIP) financing to supplement its working capital and provide adequate liquidity while it works to reorganize the business. This financing includes $175 million in DIP financing under a revolving credit facility from General Electric Capital Corporation, $15 million in DIP financing under a term loan facility from GB Merchant Partners, LLC, and $20 million in DIP financing under a junior term loan facility from PGDYS Lending LLC.
Paul White, Goody's recently appointed ceo, stated, "While Goody's has a very successful 55-year heritage and we serve an important market niche, we have recently faced considerable challenges. After careful analysis, we made the decision to restructure the business through a Chapter 11 filing in order to streamline operations, refocus on our core business, and strengthen our balance sheet so that Goody's is better positioned for the future. Having been in retail for over 30 years, I am excited by the potential at Goody's and believe that by taking the right actions now, this business can move forward effectively. We plan to close 69 underperforming stores, consolidate our distribution centers by closing one facility in Russellville, Ark., significantly reduce expenses, and create a more appropriate capital structure. In turn, we believe that a strengthened Goody's will offer our vendors an excellent channel of distribution in desirable small to midsize markets and provide our customers with a greatly improved shopping experience based on appealing merchandise and strong customer service.