ATTLEBORO — Cherry & Webb is closing its remaining 35 stores as it files for Chapter 11 bankruptcy protection.
The 112-year-old New England retailer is liquidating inventory and other assets to pay creditors under auspices of the federal bankruptcy court.
A woman who answered the phone at the South Attleboro-based company said the company planned to close all of its stores between now and April 1. She declined further comment.
Cherry & Webb has stopped accepting gift certificates. Also, sales have been final with no returns, employees reported.
In its statement, the company said that following sustained losses last summer and fall it had hoped to resolve its financial problems without resorting to bankruptcy. Those efforts failed.
The company has corporate offices and its distribution center off Collins Street in South Attleboro as well as a retail store in the adjacent Bristol Place off Newport Ave.
The company's headquarters were moved to New York about three years ago after a change in management. The company employed about 1,000 workers, many part-time.
While its stores operated under the Cherry & Webb name, the corporate moniker is CWT Specialty Stores Inc.
On Monday, the company filed a Chapter 11 petition for reorganization in federal court in New York. The company said the best option for the financially ailing company was to sell assets and pay creditors including clothing manufacturers.
According to the federal court document, the company's assets as of Jan. 1 were $34.3 million while outstanding debts totaled $32 million. For the 11 months ending Dec. 31, Cherry & Webb had $86.5 million in sales which resulted in a $2 million loss, the documents said.
The loss stems from the fact the company had trouble obtaining inventory from manufacturers for the fall, holiday season and spring sales, according to court documents and company statements. The manufacturers were starting to demand payment in advance or cash on delivery of the merchandise and the lack of inventory “ adversely impacted its year-end and spring sales results,” the company said.
Company officials reportedly had been meeting with vendors since January to reach agreements to receive inventory so the company could again become financially sound. However, when some of the vendors filed legal actions to recoup their money immediately, CWT President and Chief Executive Officer Irwin Gindi noted in court documents that it became virtually impossible to save the firm because of continued distractions and “ diversion of valuable resources to put out fires on an ongoing basis.”
Last month the chain closed eight stores. Three years ago the company had 51 stores with sales of $110 million.
Gindi and members of his family purchased Cherry & Webb in March for an undisclosed sum. Shortly after the Gindis took over, the company took out a loan to cover $8 million in overdue bills and other anticipated expenses but the losses continued. It reduced debt by selling its credit card portfolio for $15 million and used the cash to pay down debt.
Cherry & Webb was founded in 1888 and from 1963 to 1982 was owned by the Outlet Co.
About three years ago, Kathleen Mason was fired as president and chief executive office of Cherry & Webb after being part of an unsuccessful management bid to buy the company. She was credited with turning the company around financially in the early 1990s.
When the South Attleboro store opened in Bristol Place in 1993, it was the company's 50th store. At the time its merchandise line featured various brand names cosmetics, clothing, shoes, intimate apparel, sportswear and accessories.
However, industry observers say that in recent years, the company has not kept up with the times and competition.
The distribution center, which is leased, was put up more than two decades ago and Cherry & Webb has been the only occupant.
In April 1998, the 150,000-square-foot building was sold by Campanelli Realty Trust to AMB Property of San Francisco, Calif. The sale was part of an eight-warehouse, $44 million deal.