Storehouse Auction Set; Court OKs Rowe’s Interim DIP

September 21, 2006  by in UnCategorized   

By Home Furnishings Business in Furniture Retailing on September 2006 Storehouse, part of the Rowe Cos. that filed Chapter 11 earlier this week, is set to be sold at auction Oct. 6.

If a buyer isn’t found, the bankruptcy court has ordered that the chain be sold or liquidated.

The 69-store retailer also sells to consumers online through its Web site and via its catalog.

“We are actively engaged in securing an ongoing strategic partner to continue the Storehouse brand and its 37-year history of making good design accessible,” says Caroline Hipple, Storehouse president. “Our management team is in discussion with several investment bankers to secure financing for a new vision with new partners.”

The U.S. Bankruptcy Court gave Rowe interim approval of a $50 million secured debtor-in-possession facility provided by GE Capital. The facility includes the payment of GE’s pre-petition secured loans to Rowe, and requires the company to conform to a budget. The facility also dictates the sale or liquidation of Storehouse.

A hearing to approve the DIP facility on a final basis is set for Oct. 13.

Also in first-day motions, the court said the company could continue paying employees and benefits. Rowe was also authorized to honor customer deposits and continue its customer service programs.

“We are very pleased with the court’s approval of the DIP financing and the rest of the first day motions presented by Rowe,” said Jerry Birnbach, president and chief executive officer. “Having secured DIP financing, we will be able to move forward with business operations and continue providing our customers with quality products. In addition, we are optimistic that the DIP financing will offer assurance to our vendors and suppliers that they will be timely paid for post-petition services as we complete our restructuring process. The court’s approval of the first day motions will also enable Rowe to honor critical employee and customer obligations, while continuing normal business operations without interruption.”