Short Pump-Based S&K Menswear Faces Possible Liquidation
S&K Menswear, headquartered in Short Pump, could liquidate its inventory if a buyer isn’t found in the next five days. S&K asked a bankruptcy court judge on Friday for permission to sell itself to Hilco Merchant Resources, Inc.
Hilco is a company known for running liquidations of major nationwide retailers such as The Sharper Image and The Bombay Company in recent months.
S&K filed for Chapter 11 bankruptcy back in February, listing assets at the time of $41,440,100 and debts of $35,499,000. They used the filing to try and get out of leases of under-performing stores in their portfolio, including one at Virginia Center Commons. The company also intended to break contracts with local marketing firms, including $1.32 million with the advertising firm Right Minds and $402,000 with the media buying firm Kinton & Stallings.
In another attempt at raising cash, the company also sold its Short Pump headquarters on Broad at I-64. TGM Realty Investors, a subsidiary of local company Thalhimer Commercial Real Estate, purchased the corporate offices, attached 110,000 square foot warehouse and adjacent S&K retail store for $5.6 million.
Financed in part by the sale of the headquarters, S&K paid off a $13 million line of credit given to them by the US bankruptcy court in downtown Richmond as part of their filing. Sources familiar with the company say S&K only used around $7 million of the credit line to reorganize its operations.
Because of the debt repayment, sources say the company wouldn’t necessarily be liquidated if sold to Hilco, who has the option to keep some or all of S&K’s 105 retail stores open if they purchase the company.
S&K was started in Richmond in 1967 by Abe Kaminsky and Hip Siegel. They intended to offer a quality product with excellent service at a reasonable price, according to the filing. The company had 100 stores in 1990 and 200 stores in 1997. It’s unclear exactly when the business model started failing, but in 2005, the company was delisted from NASDAQ.
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Just a quick correction: Stuart Siegel stated in 2006 that S&K delisted themselves from the NASDAQ due to the newly-passed Sarbanes-Oxley Act (SOX), which would have required millions in regulation overhead had they stayed a publicly-traded company.
It’s sad to see this happen to the company that I worked for. Who would have guessed after almost 40 years of positive numbers?
The Recession is a killer, but the company really started to fall in 2006. It was the first year where they didn’t post positive YoY same store numbers.
Good bye S&K.