From Staff and Wire Reports
Discount clothing chain Goody’s Family Clothing will begin liquidating its stores, including a store in Dalton, on Friday as the retailer becomes one of the year’s first victims of the worsening economy.
The move, which comes less than four months after the privately held retailer emerged from Chapter 11 bankruptcy protection, affects the Knoxville, Tenn.-based chain’s 287 stores scattered throughout 20 Midwestern and Southern states, said Cathy Hershcopf, a partner at Cooley Godward Kronish LLP. Goody’s has a store at Walnut Square Mall in Dalton and nearby stores in Calhoun and Fort Oglethorpe.
A local store official referred questions to Goody’s corporate office. A phone call there Wednesday afternoon resulted in an after hours message.
The firm is working with Goody’s vendors and its parent, PGDYS Lending LLC. It’s uncertain what will happen to the company’s 9,800 workers after the liquidation — being handled by a joint venture between Gordon Brothers Retail Partners LLC and Hilco Merchant Resources LLC — is completed by the end of March. But without a last minute buyer or an investor to purchase high-performing stores, their job outlook is grim.
“Any loss of commerce is a concern,” said Brian Anderson, president and CEO of the Dalton-Whitfield Chamber of Commerce. “This isn’t necessarily unexpected. Not just Goody’s, but all of the national news and regional news is that there will be continued fallout in the retail category. They’ve had some concerns over the last couple of years even before the current slowdown. This is just more evidence that the retail sector is going to be as hard hit as anybody.”
Anderson said the area, which has seen unemployment reach 10.4 percent, “can’t afford any loss of jobs.”
“People will still do some shopping,” he said. “The question would be does it migrate to a different outlet in the community. One of our concerns is retail leakage” outside the community.
Anderson said the Dalton-Whitfield Joint Development Authority is developing tax incentives for retail expansion and new retail.
“Short term, we are all in this concern cycle in that we don’t know what’s going to come next,” he said.
Hershcopf said lack of consumer confidence has been a problem.
“I think every retailer experienced a great deal of pressure this holiday season because of the lack of consumer confidence,” Hershcopf said. “But undercapitalized companies like Goody’s experienced more pressure from their lenders and from their vendors.”
Goody’s filed for bankruptcy protection in June, saying at the time the move would help it address “pressures from tightening credit markets, strain on merchandise flow and a sizable but isolated number of underperforming stores in the chain.”
As part of its reorganization plan, the company closed and liquidated dozens of underperforming stores, including three in Chattanooga, shuttered a distribution center in Arkansas and a corporate office in New York. It also cut operating and corporate costs, ended its e-commerce business and an associated distribution center in Tennessee.
But that proved to be inadequate as shoppers tightened their belts amid the ongoing recession, causing a downright dismal holiday shopping period for retailers that usually bank on the Christmas spending to boost profits.
The 59-year-old retailer has now sought bankruptcy protection for a second time and executives with the company are speaking with competitors about whether they would like to purchase some of the chain’s stores.
Goody’s is owned by PGDYS Lending, which is managed by Prentice Capital Management.
On the Net:
From Staff and Wire Reports
Werner Braun: Providence Ministries provides valuable services
This Dec. 25, just like every Christmas Day for the past few years, hundreds of people will begin lining up in the wee hours of the morning to celebrate Christmas with the good folks at Providence Ministries.
Mohawk makes major investment in equipment and people
Companies don’t make multi-million dollar investments in new plants and new equipment if they aren’t confident about the future, Gov. Nathan Deal said. And the fact that major companies in the floorcovering industry have been making large investments in Northwest Georgia shows they have that confidence.
Werner Braun: Sports empower women
For centuries, certain industries and occupations seem to have been dominated by one gender or another.
Mohawk to add 420 jobs in Dalton
Mohawk Industries announced Wednesday an $85 million conversion of plants in Dalton and Rome that will add 420 jobs over the next two years in Dalton and maintain 230 jobs in Rome.
Deal: Mohawk Industries creates 420 jobs in Dalton
Gov. Nathan Deal said today that Mohawk Industries will convert two manufacturing facilities in Dalton and Rome, creating 420 new jobs and investing about $85 million into the two conversion projects over the next two years.
US home prices rise just 0.2 percent in October
A measure of U.S. home prices rose only modestly in October, adding to signs that prices have stabilized after experiencing big gains earlier this year.
Record crowds over weekend, but spending declined
Did stores shoot themselves in the foot?
Thursday openings don’t diminish Black Friday
Shannon Kelley knew exactly what she wanted.
“Bows and arrows. That’s all my little girl has been asking for since she saw ‘The Hunger Games,’” Kelley said. “She wanted them since she saw the first movie last year, but we thought she was a little young then.”
Unemployment rate edges up in Dalton
The jobless rate in Dalton rose in Dalton and Northwest Georgia in October after slipping in September.
Werner Braun: Preparing for winter’s wrath
It’s Thanksgiving week, and among the many things I’m grateful for is the temperate climate we enjoy in northwest Georgia.
- More Business Headlines
- Werner Braun: Providence Ministries provides valuable services