Value City files for bankruptcy
Business First of Louisville
The ailing Value City Department Stores chain has filed for bankruptcy protection as it prepares to shutter its stores.
The company filed the Chapter 11 application Sunday in U.S. Bankruptcy Court’s Southern District of New York, asking the court to approve an agreement with liquidation firm Tiger Capital Group LLC to conduct closing sales at “substantially all” of its stores.
Value City’s majority owner is VCHI Acquisition Co., an investment group that bought an 81 percent stake in the then-113-unit chain in January from Columbus-based Retail Ventures Inc. (NYSE: RVI), which retains a 19 percent stake.
Spokeswoman Kristin Mack said decisions on store closings will be made over the next few weeks, declining to comment beyond the company’s filing. Value City had operated 66 stores earlier this fall, but contracted with Tiger Capital in late September to conduct closing sales at 29 stores.
The retailer is down to 37 stores, including one in at 700 Eastern Blvd., in Clarksville, and one at 3430 Preston Highway in Louisville. Earlier this year, Retail Ventures closed a store at 9070 Dixie Highway and sold it to Burlington Coat Factory Warehouse Inc., which has opened a store at the location.
Value City’s bankruptcy filing comes days after it confirmed cutting an undisclosed number of employees from its Columbus headquarters, citing the difficult economy as the reason for the cuts.
As of Oct. 15, Value City employed about 4,500.
Value City in the first seven months of its fiscal year beginning in February lost $70 million on $288.5 million in revenue.
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