The U.S. retail unit of luggage maker Samsonite Corp. has filed for bankruptcy-court protection to cut its store count in half to boost earnings. Samsonite Company Stores has launched a Chapter 11 restructuring in the U.S. Bankruptcy Court in Wilmington, Del. The retailer plans to quickly close as many as 84 stores, shuttering its high-end and mall stores in order to focus on its more profitable outlet stores, said the Wall Street Journal. Samsonite Company is requesting bankruptcy-court permission to hire liquidator Hilco Merchant Resources to run store-closing sales. The retailer is seeking to start the sales by Sept. 18 and wrap them up by Nov. 30. The company, which operates 173 stores in 38 U.S. states, said its restructuring was prompted by a recession that has kept many Americans from traveling, thereby reducing demand.”The recession has caused a severe decline in consumers purchasing travel-related goods and the company has responded to this critical situation with a substantial restructuring program,” Kyle Gendreau, Samsonite Company’s secretary and treasurer, said. Gendreau, also the chief financial officer of Samsonite Corp., said Samsonite Company’s bid to streamline its operations by slashing its store count will help the retailer increase its profitability and will allow it to “further capitalize on growth opportunities.” While Samsonite Company’s Chapter 11 filing is part of a larger restructuring and cost-reduction effort by parent company Samsonite Corp., the parent itself isn’t seeking bankruptcy-court protection. Samsonite Company said it plans to emerge from Chapter 11 protection in 45 to 90 days. Samsonite Company, which employs about 650 people, sells travel bags, luggage and accessories. The company reported sales of $108.1 million last year and $112 million in 2007. In its bankruptcy petition, Samsonite Company said that as of July 31 it had $233 million in assets and $1.5 billion in debts.
Samsonite Unit Files For Chapter 11
In its bankruptcy petition, Samsonite Company said that as of July 31 it had $233 million in assets and $1.5 billion in debts.
September 3, 2009