FORTH WORTH, TX-A joint-venture partnership that won the bidding auction for the Bombay Co. Inc. proposes to liquidate its stores in the US and continue Canadian operations under a newly formed JV with two Canada-based home furnishings retailers. According to a September SEC filing, locally based Bombay operates 384 stores across the US and 57 in Canada, under its subsidiary, the Bombay Furniture Co. of Canada, Inc.
The bid-winners are Boston-based Gordon Brothers Retail Partners LLC and Hilco Merchant Resources LLC, which is based in Northbrook, IL. The amount of the bid is undisclosed.
Both of the JV partners have specialties in appraisals and the disposition of assets. Bombay filed for Chapter 11 bankruptcy protection in the US and its Canadian equivalent this September. Pending court approval, the JV will begin the process of liquidating inventory and closing Bombay stores in the US next week.
In a transaction arranged by Hilco Consumer Capital, the JV has agreed to continue Bombay's Canadian operations in partnership with Bowring and Benix & Co., which are related retailers, both based in Toronto. There are approximately 56 Bowring home furnishings stores across Canada, and Benix has more than 90 housewares stores in that country.
The agreement does not include Bombay's US intellectual property rights and real estate assets. The deal still requires the approval of the US Bankruptcy Court and the Ontario Superior Court of Justice. A court hearing is scheduled here for Monday, Oct. 22.
“Over the coming weeks and months, our US-based employees will work closely with the joint venture to prepare, stock and operate the stores during the holiday season,” says David Stewart, Bombay's CEO, in a statement. Calling this “a difficult day for Bombay in the US,” he adds, “We are glad that we have found a solution that will help provide most of our US employees with continued work through the all-important holiday season, while also preserving the Bombay name and continuing the company's successful Canadian operations.”
“Bombay represents one of the most respected retail brands in Canada,” says Fred Benitah, CEO of Bowring and Benix, in the press release. “The acquisition of Bombay Canada complements our existing Bowring and Benix brands, strengthening our position as Canada's leading home retailers.”
Bombay's falling fortunes resulted in its delisting from the New York Stock Exchange early this summer. By early May, Bombay's common stock on the NYSE fell to $0.54 a share, down from a 52-week high of $2.90 a share on June 9, 2006. Following the delisting, shares were traded on the Over-the-Counter Bulletin Board, where, on the day the auction resolution was announce, they fell to $0.07 a share.
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