THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Wednesday, July 20, 1994 TAG: 9407200383
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: By TOM SHEAN, STAFF WRITER
DATELINE: NORFOLK LENGTH: Medium: 60 lines
Fine's Men's Shops Inc., which is operating under the protection of U.S. Bankruptcy Court, received approval Tuesday for an agreement that provides the retailer with crucial financing.
The agreement with GBFC Inc., a Boston-based financial concern, will make available as much as $4 million of working capital beginning today, said Mitchell Fine, president and chief operating officer of the Norfolk-based chain of apparel stores.
This financing is essential for Fine's to stock its stores for the back-to-school and Christmas shopping seasons, he said.
Fine's, organized in 1933, listed $20.1 million of liabilities and $6.9 million of assets when it filed a Chapter 11 petition in bankruptcy court in Norfolk earlier this month.
Chapter 11 allows a company to continue doing business while it attempts to restructure its debts under court supervision.
Fine's financial condition had been weakened in recent years by the cost of financing a management-led buyout of the chain in 1989, Fine said in an interview after the bankruptcy filing.
The company had been sold in 1970 to Interco Inc., a major retailing and manufacturing concern. But Interco sold Fine's and another retail chain back to the Fine's management and Fine's investment bankers in 1989.
In testimony at Tuesday's court hearing, Fine described a tougher retailing environment and greater difficulty attracting men between the ages of 18 and 34, the chain's principal customers.
``There has been nothing really hot to drive young men into specialty stores,'' he said. Meanwhile, department stores like J.C. Penney have become more successful at attracting young men shopping for fashionable slacks, shorts and shirts, he said.
Representatives of Fine's biggest creditor, Heller Financial Inc., told Bankruptcy Court Judge Hal J. Bonney that Heller did not object to the financing arrangement between Fine's and GBFC.
Heller, a commercial lending concern that financed the management-led buyout of Fine's, is owed $6.13 million, according to Fine's bankruptcy filing.
Fine's parent company, which also filed for Chapter 11 protection earlier this month, listed debts of $9.5 million to Heller.
Attorneys representing Fine's and the U.S. Trustee's Office told the court that a committee of Fine's unsecured creditors has not yet been organized, partly because there have been no volunteers. A meeting of the company's creditors is scheduled to be conducted Aug. 4 at the U.S. Trustee's office in Norfolk.
Since filing its bankruptcy petition, Fine's has closed seven stores, including three in Hampton Roads, Mitchell Fine said after the court hearing. The stores closed were in the Southern Shopping Center in Norfolk, Tower Mall in Portsmouth and Newmarket Fair shopping center in Newport News.
The closings left Fine's with 62 stores in nine states stretching from Pennsylvania to Alabama. by CNB