UPDATE: Crabtree & Evelyn Files for Chapter 11
By Staff -- Gifts and Dec, 7/3/2009 12:00:00 AM
Woodstock, CT – Crabtree & Evelyn Ltd. (the Company), maker of bath, body and home care, has filed for Chapter 11 Bankruptcy Protection in the United States Bankruptcy Court for the Southern District of New York. The other members of the Crabtree & Evelyn Group in Canada, the European Union, Hong Kong, Malaysia, Singapore and Australia, have not filed for protection. The company reported that it owed $46.2 million in debt and had $31.7 million in assets as of March 31.
Day-to-day operations and business will continue as the company pursues a plan of reorganization for future growth and profitability, including evaluation of its real estate portfolio, strengthening brand strategies and restructuring of its financial obligations.
The Woodstock, CT-based company services approximately 3,000 wholesale accounts and operates 125 retail stores, as well as an ecommerce web site.
“The Crabtree & Evelyn brand remains strong. We are confident that Chapter 11 gives us the opportunity to restructure the company with a business model that will be sustainable for long-term growth. We look forward to continuing our relationships with customers and vendors to help shape that growth,” said Stephen Bostwick, acting president.
According to the Wall Street Journal, part of the restructuring will involve shuttering some of its underperforming retail locations. WSJ reports, "The retailer — owned by Kuala Lumpur Kepong Bhd., a publicly traded Malaysian company — said it has been suffering from a drop in sales over the past nine to 10 months, due to the downturn in consumer spending. With fewer customers roaming through the malls that house many of Crabtree & Evelyn's stores, less revenue has flowed into the business. The company expects a 24.4 percent drop in retail sales for fiscal 2009 from 2008.
The WSJ also reports that the company's wholesale sales have suffered and expects a 30 prcent decline this year, due in part to changes in management and "strategy shifts" that have hindered operations.
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