Homestead Parent Files Pre-Packaged Chapter 11
By Staff -- Home Textiles Today, 3/27/2006 12:00:00 AM
New York —
London Fog Group, the parent company of Homestead, filed to reorganize under Chapter 11 last week, a restructuring the company said should take a little less than a year.
In its filing, London Fog claimed assets of $59.8 million and liabilities of nearly $93.3 million. The company's three divisions — London Fog apparel, Homestead home furnishings and Pacific Trail outerwear — originally filed individual Chapter 11 petitions; the cases were later combined.
In its individual filing, Homestead listed assets of just under $21 million and liabilities of $78.8 million. Secured creditors hold all but $13,450 of those claims.
The London Fog Group plans to sell its Pacific Trail outerwear business, then emerge from bankruptcy in under a year, said David Greenstein, group ceo. London Fog Group has secured $40 million in debtor-in-possession financing from Wachovia Bank.
“No lay-offs are planned at Homestead, and very few overall [in the apparel divisions], because the people who are interested in the outerwear business are interested in keeping it intact,” Greenstein told Home Textiles Today.
Perry Ellis International (PEI) has entered into an asset purchase agreement for the Pacific Trail division for a total cash price of $14.5 million. PEI will serve as the stalking horse bidder at an auction administered by the bankruptcy court on a date to be determined.
Both the Homestead home furnishings division and the London Fog division — which has been repositioned as a luxury brand — will remain part of the company. The company filed to restructure because it lacked the working capital to move all three divisions forward simultaneously, Greenstein said.
Greenstein, a veteran textiles executive, led the conglomeration of the three companies in December 2004, turning his Homestead Fabrics firm into the London Fog subsidiary Homestead Holdings.
Greenstein said the Homestead business is currently running in the black, and he projected that it will double on the top line this year.
At the upcoming New York Home Textiles Market, Homestead will unveil several new micro-brands: party planner Preston Bailey; designer Jeffrey Bilhuber, high-end textiles creator Ann Gish; organic country lifestyle guru MaryJane Butters; and Bloom, a floral lifestyle collection created in-house.
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