Homestead parent files 11
By Staff -- Home Textiles Today, 3/21/2006 8:58:00 AM
New York – London Fog Group, parent of Homestead, last night filed to reorganize under Chapter 11.
The company 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 HTT.
Perry Ellis International has entered into an asset purchase agreement for the Pacific Trail division for a total cash price of $14.5 million. Ellis will serve as the stalking horse bidder at an auction administered by the bankruptcy court on a date to be determined.
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.
The Homestead business will double on the top line this year and is running in the black, Greenstein said. 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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