RoomStore Files C. 11

December 12, 2011  by in UnCategorized   

By Home Furnishings Business in Furniture Retailing on December 13, 2011

Home furnishings retailer Roomstore Inc. has filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code.

RoomStore has also secured a commitment from its current lender, Wells Fargo Bank, for a $14 million Debtor-In-Possession credit facility.

The 63-store chain, which currently has locations in Alabama, Florida, Maryland, North Carolina, Pennsylvania, South Carolina, Texas and Virginia, filed the voluntary petition Tuesday in its headquarters city of Richmond, Va. RoomStore also is a 65 percent shareholder in Mattress Discounters Group, operating 79 bedding stores in the states of Alabama, Virginia, Maryland, the District of Columbia and Delaware.

The decision to file for re-organization comes after newly appointed chief executive officer, Stephen Giordano, took the helm on Nov. 14. Giordano is a veteran industry leader with more than 30 years in the furniture business. In addition, the company's board of directors was reorganized under a new chairman, Steve Gidumal of Virtus Capital. The new board consists of Giordano, Gidumal and furniture industry expert Ron Kaplan.

"RoomStore is a viable and recognizable brand that is an established leader in the home furnishings industry," Giordano said in an announcement of yesterday's filing. "Our dedication to providing our customers with excellent value in home furnishings will provide a strong foundation as we grow and improve during restructuring."

RoomStore has engaged Lowenstein Sandler PC and Kaplan & Frank PLC as counsel, and periodic updates on the reorganization will be made available.

RoomStore will continue to operate its 63 stores in the ordinary course of business while completing its restructuring, and will also retain its interest in Mattress Discounters Group.