Home-decor retailer Z Gallerie is searching for a buyer after it filed bankruptcy for the third time Monday.
(Bloomberg) — Home-decor retailer Z Gallerie is searching for a buyer after it filed bankruptcy for the third time Monday.
The California-based firm, which sells upscale furniture pieces, said in a Delaware court filing that high mortgage rates and a resulting pullback in home sales crimped demand for its products. It also cited higher import costs, negative cash flow in many of its stores and industry headwinds as factors that led to its filing. It listed assets and liabilities of as much as $100 million each in its bankruptcy petition.
The company has secured a $1.1 million debtor-in-possession financial facility from ZG Lending SPV, its existing secured lender, according to court papers. It plans to retain Stump & Company, an M&A advisory firm, to help market its assets.
If Z Gallerie can’t find a buyer willing to invest in brick and mortar stores, the company will shut down all of its 21 locations along with its warehouse by the end of the year, Robert Fetterman, the company’s chief financial officer and interim chief executive officer said in a court filing. He also said the firm was prepared to trim its 250-person workforce as a means to save cash.
Z Gallerie started in 1979 as a family-owned business and grew steadily until it operated more than 75 stores. After Brentwood Associates bought a majority stake, the company began a slow decline because it added too many new stores and a distribution center in Georgia that disrupted operations and increased costs, Fetterman said.
In 2019, the company filed bankruptcy and sold itself to its current owner, DirectBuy Home Improvement, Inc. It filed bankruptcy for the first time in 2009.
The case is DirectBuy Home Improvement Inc., 23-19159, US Bankruptcy Court for the District of New Jersey (Newark)
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