Irvine,
CA, Nov. 9—Home furnishings retailer House2Home, hurt by the sluggish U.S.
economy and fallout from the September 11 attacks, has filed to liquidate the
assets of all of its 42 stores under Chapter 11 bankruptcy protection.
BJ's Wholesale Club will take a third quarter after tax charge of up to $65
million, or 88 cents a share, to cover its liability for 41 House2Home store
leases.
TJX Cos. will also set aside $40 million after taxes, or 14 cents per share, in
the third quarter of fiscal 2002 to cover potential liabilities from House2Home
leases. TJX spun off House2Home in 1989.
In 1997, House2Home spun off its BJ's Wholesale Club unit. Under an agreement
signed that year, TJX and BJ's agreed to share responsibility for certain
House2Home leases.
House2Home, which was also known as the HomeBase home improvement chain,
requested authorization from U.S. Bankruptcy Court in Santa Ana, California, to
liquidate merchandise and close its superstores. That process is expected to
take about 13 weeks. The company has about 4,700 employees.
Other retailers that have fallen victim to the weak U.S. economy and were forced
to close their doors include Montgomery Ward & Co. and housewares chain
Lechters.
"The dramatic and sustained drop in sales that immediately followed the
terrorist attacks put an extraordinary strain on cash flow, from which we could
not recover," Herbert Zarkin, chairman and CEO said.
Faced with stiff competition from home improvement giants Home Depot and Lowes
Cos, House2Home converted 42 of its 89 HomeBase warehouse stores to a home decor
format. The conversion was completed in August.
House2Home said it reached an agreement with its bank group, led by Fleet Retail
Finance, allowing the company to use a portion of the proceeds from the store
liquidation sales to pay employees, suppliers and vendors. That agreement is
subject to court approval.
Copyright
2001 Floor Focus Inc
