Levitz $70 million asset sale approved, completed; to exit Pa., Conn. markets

By Caroline Salls

Pittsburgh, Dec. 19 - Levitz Home Furnishings, Inc.'s more than $70 million sale of substantially all of its assets to an affiliate of Prentice Capital Management LP was approved Monday by the U.S. Bankruptcy Court for the Southern District of New York and then closed.

Prentice Capital acquired Levitz's assets at a total transaction value of more than $70 million, including the assumption of some of the company's liabilities. In addition, Prentice has agreed to fulfill Levitz' customer deposit obligations.

Upon closing, Levitz has also entered into a new $55 million credit facility with GE Commercial Finance. In addition, Prentice has provided an additional $50 million in funding to the company.

"Levitz is a great addition to our portfolio of companies, and we believe that there is a significant business opportunity here," Prentice managing director Jonathan Duskin said in the release.

"The strong Levitz brand name, operating infrastructure and dedicated associates provide an excellent platform to make this a healthy and prosperous retailer. With the financing announced today and a reinvigorated merchandising strategy, Levitz will be in a great position to take advantage of its strengths as one of the most recognizable brand names in America."

Levitz also said it will be concentrating on the profitable West Coast and New York metropolitan markets in its going-forward operations and will be exiting the greater Philadelphia and Connecticut markets.

"The decision to focus on our most profitable markets is a strategic decision, designed to strengthen Levitz Home Furnishings for the long term," Duskin said in the release.

"We are taking these actions to serve our customers more efficiently by strengthening our business model and rationalizing our store base to better leverage our marketing activities and improve our supply chain."

Following this operational realignment, Levitz will have 79 stores in the profitable west coast and New York metropolitan markets.

Store closings

Stores scheduled for closing and liquidation over the coming weeks include Danbury, Manchester, Milford, Newington, Norwalk, Plainville and Stamford in Connecticut; Downington, Fairless Hills, Hatfield, King of Prussia, Langhorne, Philadelphia, Plymouth Meeting, Reading, Springfield and Whitehall in Pennsylvania; Cherry Hill, Deptford, Lawrenceville, Livingston, Mays Landing, River Edge, and Wall Township in New Jersey.

Also, the company will close and liquidate stores in Claymont, Newark and Wilmington in Delaware; St Paul, Minn.; Nesconset (Clearance Center) and Queens (Queens Boulevard) in New York; Scottsdale, Ariz., and Cathedral City, Glendale (Clearance Center) and Oxnard in California.

The liquidations will be handled by Great American Group.

The company said it will continue to pay affected employees through at least Jan. 31 and expects to make every effort to place affected associates at remaining stores.

Levitz, a Woodbury, N.Y., furniture retailer, filed for bankruptcy Oct. 11. Its Chapter 11 case number is 05-45189.

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