ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Wednesday, April 17, 1996 TAG: 9604170041
SECTION: BUSINESS PAGE: B-8 EDITION: METRO
SOURCE: MEGAN SCHNABEL STAFF WRITER
THE RETAILER'S LAST DISCOUNT stores in the Roanoke and New River valleys will soon be history. The company is filing another bankruptcy reorganization petition and will shutter 18 of the 30 stores it still runs in the Southeast.
Discount retailer Brendle's Inc. said Tuesday it will close its Roanoke and Christiansburg stores as part of its second bankruptcy reorganization in four years.
The decision to close the stores, each of which employs about 30 people, was based strictly on performance, said David Renegar, the Elkin, N.C.-based company's chief financial officer.
Brendle's will close 18 of its 30 stores in the Southeast, putting 500 to 600 employees out of work, Renegar said. Staff at the company's headquarters will be cut proportionately.
Details on the stores' final closing dates were not available. Renegar did not know how much time remains on the company's leases. No one at the shopping centers or their owners - Kane Realty Corp. of Raleigh, N.C., which owns Tanglewood Mall, and Faison Associates of Charlotte, N.C., which owns Marketplace - was available for comment late Tuesday.
Brendle's also plans to change the merchandising focus of its remaining 12 stores. It will expand its offerings of party goods, craft items, health-care goods, and fitness and outdoor products. It also will reduce or discontinue several other merchandise categories but has not announced where the cuts will be made.
"The category mix we have right now is not viable," Renegar said. "We need to change the format." Other catalog retailers have experienced similar problems in recent years, he said.
Brendle's filed for reorganization in the U.S. Bankruptcy Court for the Middle District of North Carolina. The company said it lacked the money it needs to change the focus of its inventory while it is responsible for current leases.
Under Chapter 11 protection, the company will be able to put all available funds - including a $25 million credit line from Foothill Capital Corp. - toward the restructuring and delay paying off creditors until the shift is complete.
The company expects the reorganization process to be a relatively short one.
This is the second time in four years that the retailer has filed for protection under Chapter 11 of the federal bankruptcy code. The chain sought protection in November 1992, saying it was having trouble getting merchandise from suppliers. It closed about 20 stores - including one at Valley View Mall in Roanoke and one in Lynchburg - over the next year and a half and emerged from bankruptcy in April 1994.
The earlier reorganization accomplished what was intended at the time, Renegar said.
"This Chapter 11 is more of a mechanism to accomplish a plan," he said. "The first Chapter 11 was more of a defensive stance."
The company reported 1995 sales of $153 million, down 8 percent from the prior year.
LENGTH: Medium: 61 linesby CNB