Court OKs sale of Bombay stores in Canada
Subsidiary of Benix expects to continue to operate all units
Clint Engel -- Home Accents Today, 10/29/2007 5:49:00 AM
The U.S. Bankruptcy Court in Fort Worth, Texas, has approved the sale of The Bombay Company’s 50 stores in Canada to a newly formed subsidiary of Canadian retailer Benix.
The stores will continue to operate as Bombay and the deal, arranged by Toronto-based Hilco Consumer Capital, is expected to close about Feb. 5, according to a release.
The company did not disclose the purchase price. However, a source familiar with the plan said Benix will pay about $16.5 million, which is the cost of inventory plus 10.5%.
Earlier this month, the court approved a plan to liquidate Bombay’s 300-plus U.S. stores and distribution centers through Hilco Merchant Resources and Gordon Brothers Retail Partners, who purchased the inventory in a deal valued at about $106.2 million, according to the source. The stores are expected to close by the end of January.
Beginning immediately and until the deal closes, a joint venture of Gordon Bros. and Hilco will manage the Canadian stores, and conduct inventory promotions and clearance sales, the release said.
Upon closing, all stores will transition to the Benix subsidiary, which is expected to keep all stores in place and hire the majority of the then-existing employees.
“We are excited about this acquisition,” said Fred Benitah, CEO of The B&C Group, which owns and operates Benix as well as the Bowring retail chain, with a total of 150 stores across Canada.
“Bombay represents one of the most respected retail brands in Canada,” he said. “Bombay Canada both complements our existing retail brands and strengthens our position as Canada's leading homeware retailer.”
Bombay director Nigel Travis said the Canadian market has always been very important to Bombay.
“We are happy the Bombay brand will continue into the future as part of the Benix group and that our valued employees will play an important role in ensuring the transaction’s long-term success,” he said. “We will all work together for a smooth and seamless transition, with the goal of minimizing disruption to customers.”
Bombay filed for Chapter 11 bankruptcy protection Sept. 20, with mounting losses and after failed efforts to find new capital or a buyer.
--Furniture Today
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