Discounter Bradlees Plans to Liquidate

Bradlees Inc. said it filed for Chapter 11 bankruptcy protection and will begin shutting down its chain of 105 discount stores this week. This comes after it explored several options to change its financial outlook, including a possible sale of the company. The request for bankruptcy protection is the second for Bradlees, whose stores are mostly located in the Northeast. The company initiated Chapter 11 reorganization in 1995 and resurfaced in early 1999, but its bottom line never fully recovered after the restructuring. This time, the company expects to liquidate its assets. Bradlees said it has reached an agreement to sell its inventory to a group led by Boston’s Gordon Brothers Retail Partners, subject to Bankruptcy Court approval. Bradlees, which had revenue of $1.5 billion in 1999, said it expects to retain its 9,800 employees through the liquidation process. The company cited a general economic downturn, including rising interest rates and higher gas and heating oil prices as reasons for its financial trouble. Other problems included new competition, unseasonable weather in the first half of 2000, and more recently, the tightening of trade credit and curtailment of inventory shipments, it said. Its shares closed unchanged at 22 cents on Nasdaq, off the 52-week high of $10.50. Nasdaq said after the news was released that it had halted trading in the company until Bradlees provides additional information.