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HARRISON, N.J. - When Lechters filed for Chapter 11 bankruptcy protection late last month, it was done to ensure the financial underpinnings of the chain's reorganization and evolution as thinkkitchen, a new, more focused retail operation, the retailer stated. However, vendors are concerned about the future of the company, which means some suppliers will remain on the sidelines as it tries to remerchandise about 250 stores.
In a public statement corresponding to its Chapter 11 filing, Lechters emphasized that it had arranged an $86 million debtor-in-possession financing commitment from Fleet Retail Finance and Back Bay Capital Funding, and this DIP would ensure payment to suppliers for post-petition invoices.
Above all, the statement seemed intended to reassure existing vendors that they can confidently ship to the retailer. It also noted the filing would permit the company to restructure debt and claims from landlords for stores closed under the restructuring program as it implements its strategic repositioning plan to rollout the thinkkitchen format into existing Lechters locations.
Even as they are being remerchandised, the stores will be shifted to their new brand identity under the banner Lechters thinkkitchen. President and ceo David Cully recently told DSN Retailing Today that the Chapter 11 filing didn't come exactly as a shock to most Lechters vendors.
"I think a number of constituencies were anticipating something like this had to occur. The whole notion is of restructuring debt with $38 million in bonds and landlord debts associated with closing...