It is hard not to see the perverse humor in a doomed retail chain trying to stave off the inevitable by chopping off an arm and a leg as it goes through bankruptcy proceedings:
The RoomStore is seeking U.S. Bankruptcy Court approval to close 25 stores and sell their inventory and other assets at an auction next month.Sales which, due to the continued cratering of the housing market, are never going to recover. But just like Borders books, RoomStore is apparently determined to thrash about in its death throes for as long as it possibly can even though it should be perfectly obvious that if few people are buying houses, they also aren't going to be buying a whole lot of furniture.
The company, which filed documents seeking to close the stores last week, asked to have bids submitted at auction on Jan. 4.
No stalking horse bidder was named, but the company said it reserved the right to name one before the auction date.
The RoomStore said the underperforming locations were chosen prior to its bankruptcy filing during a review of operations.
The majority of the closings affect stores in Texas, with 16 occurring in the state, including five locations in San Antonio. One location is described as the El Paso Distribution Center in court documents.
Three locations in Virginia and Maryland, and one each in Pennsylvania, Florida and Alabama, also will close.
In addition, the retailer is seeking authority to designate up to 15 additional stores for closure by Jan. 31, 2012.
The RoomStore operates 64 stores in eight states and has five warehouses, bankruptcy court documents said.
The company filed for bankruptcy protection on Dec. 12 with assets of $56 million and debts of about $52.5 million, including 13 unsecured furniture industry creditors owed $3.8 million.
The retailer said declining sales and depleted cash due to repaying much of a revolving loan this summer, led to the filing.