Crabtree & Evelyn Ltd., a bath and body products retailer, has filed for bankruptcy protection and will begin restructuring, joining a string of other U.S.-based retailers such as Eddie Bauer Holdings Inc., Lenox Group Inc. and Filene's Basement Inc. (
see Retailers and bankruptcy).
Crabtree plans to use a $40 million debtor-in-possession loan from its parent, Malaysia's Kuala Lumpur Kepong
Berhad to begin its reorganization. Crabtree will use the DIP to pay off the roughly $21.73 million KLKB is due and use the rest for working capital. (The Deal Pipeline subscribers can see the full story
here.)
Crabtree's plan isn't all to different from Eddie Bauer's, which went into Chapter 11 with a prepack. In the meantime, Eddie Bauer will auction its assets July 16. Stalking-horse bidder CCMP Capital Advisors LLC is kicking off the the bidding with
$202.3 million. (The Deal Pipeline subscribers can see the full story
here.)
But a prepack doesn't guarantee the retailer will go to the the stalking-horse bidder. Filene's Basement Inc.'s assets were won by Syms Corp. and Vornado Realty Trust (NYSE:VNO) in a second auction. In a preliminary auction, stalking-horse bidder Crown FB LLC was outbid by Men's Wearhouse Inc. (The Deal Pipeline subscribers can see the full story
here.). A prepack also doesn't mean that the retailer will be able to restructure successfully.
Both Eddie Bauer and Filene's Basement filed for Chapter 11 twice. Other retailers such as Fortunoff Inc. have had to liquidate after filing for bankruptcy a second time. - Maria Woehr
Continue reading below
