A book retailer now makes unexpected plans to close all locations following a bankruptcy that fans hoped would help the company.
Tattered Cover filed for bankruptcy last October and the company’s CEO has released a new update on its case.
CEO Brad Dempsey said the company has submitted a revised plan to lift itself out of financial troubles, but this had to be approved by the U.S. Bankruptcy Court for the District of Colorado, according to the Denverite.
The Colorado book chain has two locations in Denver, one in Littleton, and one in Aurora.
CEO Dempsey said the company was considering several cost-cutting measures and these could look at possibly moving the current stores to cheaper retail spaces, per Tattered Covers’ website.
He added that the chain could become “a smaller, more modern and financially sustainable business.”
“Without a doubt we still have complicated negotiations to complete, challenging local economic pressures to navigate, and difficult decisions to make as we forge ahead toward establishing profitability,” Dempsey said in a statement.
“But with the continued hard work of our incredible team and support from people in Colorado as well as across the nation, we are optimistic about Tattered Cover’s future.”
Dempsey predicted that the company could break out of bankruptcy by June 2024.
He said it hoped to do this by making $3.4 million to cover unsecured debts and fix its relationship with partners.
Parts of the CEO’s optimism has come from a strong holiday season which generated lots of sales and money for Tattered Cover, reports The-Sun.
“Despite this, the company’s expenses could also increase due to due higher wages, rents, and health insurance premiums.”
The unapproved debt plan hopes to see the company out of debt by 2025 and the U.S. Bankruptcy Court for the District of Colorado is expected to hear the plans in May, according to the Denverite.
Other retailers have had to reconsider the fate of some of their physical retail locations.
The U.S. Sun previously reported that a Mooks-A-Million store in Lafayette, Louisiana had started a closing down sale.
The sale started on December 24 and Google Maps confirmed that the store has down officially closed.
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Also Read: A Massive Cosmetics Company Now Closes in New York
Other Economy News Today
A massive travel company now faces high risk of bankruptcy as the business hovers around $1 billion in debt, sources report.
Spirit Airlines faces a fight for its survival, reports TheStreet.
The company had bet its future on merging with JetBlue, a deal that would have ended Spirit’s low-cost business model.
Like Frontier Airlines, Spirit Airlines operates using a full ‘a la carte’ model.
Customers pay a low price to get a ticket on the plane.
Anything else they want including a seat assignment, carry-on bag, checked baggage, and even water, tea, or coffee costs extra.
Had the merger with JetBlue gone through, Spirit likely would have adopted its new partners’ model.
JetBlue offers low fares with seat assignments and carry-ons included while checked bags still cost extra.
Now that federal regulators blocked that merger, Spirit faces a heavy debt load and continuing losses.
The company lost $214 million in the fourth quarter and $495 million for the year, That followed a $598 million loss in 2022.
“Spirit has maintained a defiant stance, and CEO Ted Christie believes the company has a path forward,” reports the outlet.
“The Spirit team is 100% clear and focused on the adjustments we are currently deploying and will continue to make throughout 2024 to drive us back to cash flow generation and profitability,” he said in the company’s fourth-quarter earnings release.
“Regarding liquidity, we believe our $1.3 billion in total liquidity at year-end 2023 should be more than adequate to get us to our primary goal of getting the business to generate cash,” CFO Scott Haralso said.
“And, while we have confidence in our ability to return to positive cash generation, we will continue to look at other opportunities to further shore up our liquidity resources as we progress through the year.”
Haralso did note that the company has significant debt maturities coming up.
“The company is aware of its 2025 and 2026 debt maturities and is assessing options to address those maturities when the time is appropriate,” he said.
“Spirit has more than $1 billion debt that it has to repay, and soon, but some of that debt is trading for less than par value on public markets, suggesting some market doubt about whether the notes are worth what the company says they are.
One issuance, due 2026, is trading at 74 cents on the dollar.
Another set of notes, due in 2025, are going for 76 cents on the dollar,” the website shared.
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Also Read: Another Business Now Announces Unexpected Layoffs in Kentucky
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