According to Reuters, Cathy Hershcopf, a bankruptcy partner at law firm Cooley Godward Kronish LLP, confirmed the rumors. “The company is in the processes of obtaining bids to liquidate substantially all collateral and inventory,” she said regarding the company who only recently emerged from bankruptcy in October. “The retail environment is very difficult and they did not have sufficient capital to weather the bad times.”
The law firm acts as a liaison between Goody’s vendors and the company and Prentice Capital Management. PGDYS Lending LLC is Goody’s parent company, and Prentice is the manager of PGDYS.
According to Reuters, Bob Carbonell, chief credit officer for retail credit rating service Bernard Sands, confirmed that the company plans to liquidate inventory. He said going-out-of-business sales will begin as early as Friday.
Goody’s has not responded to emailed questions regarding the close-out.
A leaked internal memo from Goody’s CEO Paul White confirmed the reports.
“Unfortunately, due to the financial strain we are experiencing, along with the difficult retail climate, we have not been successful” to meet our companies financial needs, said White in an internal memo to employees. “With our distressed financial position, we have several separate parties involved in our future and the decisions around that. Unfortunately, with so many parties involved, consistent communication is a challenge and that led to the vendor discussion we were not prepared for at the company yesterday.”
White continued, confirming the company’s plans to liquidate inventory. “As you know, the decision was made (Sunday) to select a firm that would lead the process of liquidating the inventory at our store. We are now working on the next steps and what that means for us here at the company.”
On Tuesday, a Goody’s store employee confirmed to the Middlesboro Daily News that their store was asked by the corporate office to stop selling gift cards, halt their layaway program, and cancel tuxedo orders. He said reports of the store closing was only a rumor. Other stores reported the same change in policy.
The Goody’s corporate office would not comment on the situation then.
Last year, Goody’s filed for Chapter 11 bankruptcy on June 9, and emerged from bankruptcy on October 20, according to a press release from the retailer. Goody’s has already closed and liquidated 69 stores and terminated their e-commerce business.
According to a company fact sheet, the Knoxville-based retailer has an annual revenue of over $800 million, has 287 stores, and employs approximately 9,800 people.
The company’s heritage is local, with ties to Middlesboro. In 1913, the company’s founder, Mike Goodfriend, arrived in Athens, Tenn., from Middlesboro and opened The M. Goodfriend Store. After his son M.D. continued the outlet stores, Mike Goodfriend’s grandson, Bob Goodfriend, joined the company and changed the name to Goody’s Family Clothing in 1978.
Goody’s joins a list of other stores in Middlesboro that won’t survive the current economic atmosphere. Just in the Middlesboro Mall, four stores have closed their doors or are liquidating their inventory, starting with Dawahares in September last year, and then Steve & Barry’s, Underground Attitude, and KB Toys most recently.
Stephen Woodward is a Staff Writer for the Daily News. He may be contacted at swoodward@middlesborodailynews.com.
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