Retailer seeks bankruptcy protection, cites storm

Published on NewsOK Modified: January 7, 2013 at 7:36 pm •  Published: January 7, 2013
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NEW YORK (AP) — The owner of the Mandee, Annie Sez and Afaze clothing stores cited effects from Superstorm Sandy as it sought Chapter 11 bankruptcy protection Monday.

Big M Inc., of Totowa, N.J., filed the petition in U.S. Bankruptcy Court in New Jersey. It said in an emailed statement it intends to continue to operate its stores and expects to "emerge as a stronger company."

Court papers, however, state that the company "intends to consider all strategic options to maximize the value of its business and properties," language often seen as an indicator that a sale of the business is possible.

The family-owned retailer said in the court filing that it started a restructuring process in November 2011, after the economic downturn eroded its business and left it unprofitable. It cut expenses, refinanced debt, renegotiated leases, sold property and closed 27 underperforming stores in 2012.

Court papers said those steps had put it on a path toward profitability when Sandy hit. The late October storm closed most of its stores in in New Jersey, New York and Connecticut for a week or more, along with its offices and distribution center. Three stores were shuttered for a month and continue to operate on a limited basis.

Big M said it depleted its resources in getting its stores back into operation but business never rebounded. The company also said in the filing that it hasn't collected from its insurance carrier, in part because of a disagreement over the amount owed by Westport Insurance Corp., a unit of Swiss Re America Holding Co.