Best Products, Citing Sales Decline, Files for Chapter 11

Best Products Co. said Tuesday that it filed for Chapter 11 protection in Bankruptcy Court, citing declining sales and earnings and deteriorating support from vendors.

The struggling Richmond, Va.-based catalog showroom retailer had warned that a bankruptcy filing was imminent late Monday in a filing with the Securities and Exchange Commission. It said it suspended some payments to vendors and said it might default on certain loan covenants, although it said it was in compliance as of this week.

Best filed its bankruptcy petition in Richmond. The company received a debtor-in-possession credit facility of $250 million from CIT Group/Business Credit Inc.

The retailer, which sells furniture, household goods and other merchandise, has had five straight quarterly losses. It was previously in bankruptcy and emerged from it in June 1994.

Shares in Best fell 22 cents to close at 34 cents on the New York Stock Exchange before the filing was announced.