Quiksilver Inc., the bankrupt California clothing designer, considered putting “pop-up” outlets inside shops abandoned in the collapse of RadioShack Corp.
The arrangement was explored after Quiksilver hired the same liquidation service RadioShack used in its own bankruptcy, the surfwear maker’s chief financial officer said Thursday. Ultimately, Quiksilver rejected the idea.
“They simply weren’t locations that were suitable,” CFO Andrew Bruenjes said in an interview in Wilmington, Delaware, federal court, where Quiksilver filed for creditor protection this week. Quiksilver still plans to use temporary stores to sell inventory from some of the locations it’s closing, Bruenjes said.
During a hearing earlier in the day, a Quiksilver attorney mistakenly told the bankruptcy judge that some of the pop-ups would be inside defunct RadioShack consumer electronics stores.
Quiksilver will put together 23 pop-ups, said Phil Denning, a spokesman for the Huntington Beach, California-based clothing retailer.
U.S. Bankruptcy Judge Brendan L. Shannon Thursday gave Quiksilver temporary permission to borrow as much as $120 million in the opening weeks of its bankruptcy to keep operating while it restructures. The company will return to court next month to ask for permanent borrowing authority and increase the loan to $175 million.
Shannon also approved a number of routine requests that will allow the company to run normally while in bankruptcy, including giving Quiksilver permission to pay about $30 million to its most critical suppliers.
Only the company’s U.S. business is affected by the case. Operations in the rest of the world produce most of Quiksilver’s revenue and aren’t in bankruptcy.
Under a proposal worked out before the Chapter 11 filing, Quiksilver would be taken over by its senior lenders in return for a reduction in debt.
As part of its restructuring, Quiksilver plans to close 27 stores. Some of the goods in those shops will be sold in the pop-ups, Denning said. The company had about 700 stores as of April 30.
When retail chains go bust, they sometimes hire professional liquidators, who sell the remaining inventory, shut down the stores and split the proceeds with the retailer.
After it filed for bankruptcy, RadioShack closed about half its stores and sold about 1,700 of the remainder.
Shannon also presided over that case.
The case is In re Quiksilver Inc., 15-11880, U.S. Bankruptcy Court, District of Delaware (Wilmington).