THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Tuesday, May 2, 1995 TAG: 9505020377
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY STEPHANIE STOUGHTON, STAFF WRITER
LENGTH: Medium: 53 lines
Discount chain Rose's Stores Inc. said Monday it has emerged from bankruptcy protection, armed with extra credit and a strategy for survival.
In January, Rose's said it had matched and then exceeded one of the biggest challenges in its reorganization plan - generating $25 million in cash flow during the 11 months ended Dec. 31, with almost $8 million of that amount raked in during the last month of the year.
On Friday, the chain met the last condition - attracting enough credit to emerge from bankruptcy. The Henderson, N.C.-based company now has a $125 million, three-year revolving credit facility with The First National Bank of Boston and The CIT Group/Business Credit Inc. as agents.
``We are very happy to have successfully completed our reorganization,'' said R. Edward Anderson, Rose's president and chief executive officer. ``We can now focus exclusively on satisfying the needs of our customers and on delivering consistent profitability.''
As part of the plan, suppliers who extend credit to the company will be supported by a $5 million letter of credit and a $15 million subordinate lien in the company's real estate holdings.
Anderson said he believed the extra protection ``provides a strong incentive for our suppliers to extend favorable terms and credit limits.'' As a result, Rose's will have a better chance of keeping its shelves stocked, he added.
At its peak, Rose's had more than 200 outlets scattered across the Southeast, mainly in rural towns and smaller markets. Then came Wal-Mart and other newcomers.
When Rose's filed for bankruptcy protection in Raleigh in the fall of 1993, analysts criticized the company for failing to size up the competition.
Since its filing, Rose's has cut back, halving the number of stores it operates. It now has 106 outlets in 10 Southeastern states, including six in South Hampton Roads.
Beginning next year, Rose's will renovate some of its aging stores, spokesman Bob Gorham said. The company also plans to differentiate itself from competitors such as Wal-Mart and Kmart by carrying more selection in niche areas like apparel or cosmetics.
Company officials are determined to attract once-loyal customers who left during Rose's troubles, Gorham said.
``We are concentrating on having customers want to visit our stores again,'' he said. ``During Chapter 11, our stores weren't always stocked, and some of the customers left. Now, we have a chance to get them back.''
KEYWORDS: BANKRUPTCY by CNB