SEAMAN FURNITURE COMPANY TO REORGANIZE; COMPANY TO CONTINUE 'BUSINESS AS USUAL' IN CORE MARKETS
SEAMAN FURNITURE COMPANY TO REORGANIZE;
COMPANY TO CONTINUE 'BUSINESS AS USUAL' IN CORE MARKETS
UNIONDALE, N.Y., Jan. 3 /PRNewswire/ -- Seaman Furniture Company, Inc. announced today that, because of the severe and prolonged recession affecting its key markets, it has filed a voluntary petition for reorganization under Chapter 11 of the Federal Bankruptcy Code. The filing was made in the U.S. Federal District Court in Manhattan. The filing will enable the company to continue business as usual under the protection of the court while management reorganizes the company's financial structure to respond to current business realities.
The company also announced that it has streamlined its operations to focus on a core group of stores in its traditional New York City, New Jersey and Long Island markets. In addition, it will continue to operate two stores in Connecticut. These stores, and the company's two warehouses, will operate on a business as usual basis. As part of its downsizing, the company has withdrawn from the Greater Philadelphia marketplace and other selected locations.
As part of its filing, Seaman's has also asked the court for, and expects to receive, orders enabling it to:
-- Continue paying salary and benefits to employees without interruption.
-- Continue the company's full protection for customer down payments.
The company said that it has ample merchandise in its warehouses to make deliveries of furniture on order and is in a strong stock position for future orders. Seaman's will continue its full customer service program throughout the reorganization.
In addition, Seaman's has obtained a $25 million financing commitment from GE Capital. These funds will be available to, among other things, meet the company's continuing obligations to suppliers and vendors during the restructuring process.
"I believe the steps we have taken today, and the resources we have assembled, will allow Seaman's to emerge from the current economic recession as a strengthened retailer," said Matthew D. Serra, president and chief executive officer.
"As an organization, we have several strengths that will help us move quickly and successfully though this process. We have a dominant position in one of the largest furniture markets in the United States, the support of our valued suppliers, and a fine employee organization dedicated to our loyal customers," Serra continued. "In addition, our cash on hand and the $25 million financing commitment from GE Capital will enable us to meet our commitments to suppliers and employees through this period."
Serra concluded: "The Seaman's balance sheet will now be changed under the supervision of the court. Indebtedness will be reduced and this will preserve Seaman's as a leader in its market. I look forward to Seaman's concluding this transition expeditiously and emerging as a stronger company."
Seaman Furniture Company was taken private by KKR in 1988. KKR and the company's bank lenders are Seaman's largest shareholders. A spokesman for KKR said that it continued to be a strong supporter of the company. "Seaman's has an excellent management team and a unique consumer franchise. Given the unprecedented, prolonged economic downturn in Seaman's markets, the actions taken today are the right ones to create a viable capital structure. We will continue to work together with the company, its management, and its lenders to bring the reorganization process to a successful conclusion."
Seaman Furniture Company is privately held and is the largest furniture retailer in the Northeast.
/CONTACT: Dawn Dover or Lee Callaway of Kekst and Company, 516-745-1614 or 212-593-2655, for Seaman Furniture Company/ CO: Seaman Furniture Company, Inc. ST: New York IN: REA SU: FC -- NY020 -- 6454 01/03/92 10:55 EST