Oct. 27 (Bloomberg) -- An affiliate of Gordon Brothers Group LLC, the store liquidation specialist, will bring Urban Brands Inc. out of bankruptcy, saving at least 175 of the chain’s 210 stores, lawyers for the two companies said.
GB Merchant Partners, the unit, won an auction yesterday for the company, which operates under the Ashley Stewart brand and calls itself “the premier fashion retailer for the plus-size urban woman.” GB Merchant will pay $15.7 in cash and assume some liabilities, company attorney Mark D. Collins said today in court.
“We’re taking this company out of bankruptcy and restarting its growth from a new and stronger position,” Managing Director James C. Rhee of GB Merchant Partners said in an interview.
U.S. Bankruptcy Judge Kevin Carey said today in a hearing in Wilmington, Delaware, that when Urban Brands filed for bankruptcy last month, he had a “strong impression” the chain would be liquidated. He scheduled a hearing later today to approve the sale to GB Merchant.
Urban Brands, based in Secaucus, New Jersey, filed for bankruptcy Sept. 21, blaming the recession and listing debt of $100 million to $500 million and assets of $10 million to $50 million.
Ashley Stewart, founded by Thor Equities LLC Chief Executive Officer Joseph J. Sitt, has stores in urban areas from New York to Los Angeles, according to its website. The flagship store is on 125th Street in the Harlem neighborhood of New York, where it has operated since 1999.
Gordon Brothers often competes at bankruptcy auctions for the right to conduct going-out-of business sales. The company won contracts to liquidate Linens ‘n Things Inc. and Boater’s World stores.
The case is In re Urban Brands Inc. 10-13005. U.S. Bankruptcy Court for the District of Delaware (Wilmington).
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