The pandemic has dealt a significant blow to ABC Carpet & Home, leading the luxury retailer to file for Chapter 11 bankruptcy.
The filing was made late Wednesday night, with the company listing $50 million in assets and $100 million in liabilities, according to Bloomberg. Under Chapter 11, ABC Carpet & Home can continue to operate, have some of its debts wiped out and make a plan to repay the rest.
As a New York-based seller of luxury home goods, the company struggled when many of its regular customers fled the city to ride out the pandemic. But the coronavirus wasn’t the only cause of ABC’s troubles. The retailer also failed to develop much of an e-commerce operation. Additionally, delayed renovations have hampered efforts to bring customers to its Union Square store.
A private-equity sale of the business previously fell through. ABC Carpet & Home is working with several financial advisers on finding either a buyer or financing.
Bloomberg reported prior to the filing that bankruptcy could be a disaster for ABC Carpet & Home employees. WARN notices were sent this week, a required 60-day notification required by state law when more than 50 employees at a 100-person plus company in New York will lose their jobs.
Bloomberg also reported prior to the filing that the retailer would receive a debtor-in-possession loan from 888 Capital Partners, a potential buyer of the company.
ABC Carpet & Home was started as a pushcart business by Austrian immigrant Samuel Weinrib in the 19th century. Great-granddaughter Paulette Cole was responsible for creating the company’s store at 888 Broadway in Union Square.
ABC Kitchen, which is housed in the same building, is owned separately and not involved in the bankruptcy filing.
[Bloomberg] — Holden Walter-Warner