According to The Knoxville News Sentinel, Knoxville-based Goody’s Family Clothing is closing its doors, having failed to secure sufficient capital to continue its operations. The business had just emerged from bankruptcy three months ago.
Going-out-of-business sales could appear as early as Friday. Goody’s got its start as an apparel retailer in East Tennessee more than 55 years ago. On Tuesday, a meeting of potential liquidators who may run the sale was held, according to Bob Carbonell, chief credit officer for retail credit rating service, Bernard Sands.
More than 800 Knoxville-area employees will be affected by the closing. Mike Edwards, president and CEO, the Knoxville Chamber of Commerce, said this will be especially painful to the local economy.
“With Goody’s we have a company trying to do a workout in a weak economy, but it’s tough to survive when you’re already in distress,” Edwards declared. Goody’s officials and Prentice Capital Management, the managing member of PGDYS Lending LLC, which took ownership of the company in 2006, did not provide any comments to this development.
In June, Goody’s filed for bankruptcy protection. As part of its restructuring, 70 stores were closed, along with a distribution center and a New York office. Emerging from bankruptcy in October, the company began offering its own bath and spa line, Magnolia Spa; a section focused on local college teams and new vendors including Chaps for Men and Ashley Judd clothing line.
Paul White, Goody’s CEO, had expected the company to turn a profit in the fourth quarter, however reports surfaced in December that the company was once again in financial distress. This followed a trade publication reporting the company had exhausted its cash, credit and restructuring reserves.
In December, Goody’s stopped issuing new gift cards and discontinued lay-aways and ended its tuxedo rental service. It held a conference call with suppliers seeking concessions during the week of Christmas.
Goody’s was founded in 1952 by the Goodfriend family. It grew to over 300 stores that operated primarily in the South and Midwest. GMM Capital and Prentice Capital brought the company in 2006 and it became a privately held company. PGDYS Lending LLC and Prentice Capital Mgt currently own the company. A fact sheet posted December 10th on Goody’s website stated the company had 9,800 employees and annual revenues of $800 million dollars.
Source: www.knoxvillenews.com
