Lenox Files for Bankruptcy
"Business as Usual," says CEO
By Staff -- Gifts and Dec, 11/24/2008 8:27:00 AM
Eden Prairie, MN — Tabletop and giftware vendor Lenox Group filed for Chapter 11 bankruptcy in the Southern District of New York. The company plans to file a variety of first day motions with the Court that, if approved, would allow Lenox to continue to conduct business without interruption. Lenox will seek Court approval for a new $85 million debtor-in-possession financing facility from its current revolving lender group to pay for ongoing operations such as payroll, materials and normal operating expenses.
Lenox will keep trying to sell its business while in Chapter 11 through a sale process to be approved by the Court. The company and its lenders entered into an agreement that the company's assets will be sold to a new entity formed by the lenders in exchange for cancelling a portion of the company’s secured loans. The agreement is subject to higher or better offers, and will be considered as one offer in a bidding process to maximize value of the company's assets.
"We want to assure our employees, customers, vendors and communities that Lenox is conducting business as usual," Marc Pfefferle, Lenox CEO, said in a statement. “While fundamentally sound, our business has been significantly impacted by economic conditions and excessive debt levels incurred at the time Department 56 purchased Lenox Inc. in 2005." (Department 56 bought Lenox Inc. in 2005 and changed its name to Lenox Group.)
"After exhausting all other possibilities and considering the current state of credit markets and the economy," Pfefferle continued, "we determined that the best way to complete a restructuring of the balance sheet and protect our franchise value was to pursue a sale of the company under Court approval in a Chapter 11 proceeding. This process will give the company flexibility to operate on a normalized basis, dispose of unproductive assets, reduce operating costs and strengthen its balance sheet."
Lenox expects the Over The Counter (OTC) bulletin board to temporarily halt trading in the company's stock pending receipt of additional information on the company's financial condition and reorganization plans. Lenox began trading on the OTC board after being suspended from the New York Stock Exchange in May. Lenox’s principal bankruptcy attorneys are Weil, Gotshal & Manges LLP and its financial advisor is Berenson & Co.
After hearing that Lenox had finally filed for bankruptcy..I was not surprised..I had worked for them for 10 years..The last 8 of those years got progressively worse...With the sale to Dept 56 it was the straw that broke the so called camel's back...They had no clue how to run a China and Crystal business....and yes to many things were being made out of the country causing customers to look elsewhere for their American made products..However Lenox upper management didn't listen to us in the field..Customers wanted nice china that was Micorwave..Oven..and Dishwasher safe..They did this on a small scale..Too little too late....I am very sad to see such a great company going down the drain....My years with Lenox were wonderful..I still miss everyday I worked for them...
Pamela Eneix - 2009-01-15 10:30:00 EST
Another case of "chasing the chains" or one after another formerly great companies seeking rapid growth at the expense of their long standing distribution channels via independent retailers. Most of the home category brands have fallen into this trap. First come the orders that are equal to 10% or more of the company's entire volume, then come the charge backs, coop advertising, mark down money etc. all the way into a losing proposition. Then come the investment bankers that specialize in turnarounds...then the public financing. But when the chains have become 25% or more of any company's annual sales volume they just go deeper and deeper into this trap. The only way to avoid this death spiral is to not sell to the chains at all. You may not grow as fast as your competitors...in fact you may not grow at all for a few years, no quick sale to investors and no public offering, but you will still be in business after your competitors have filed for bankruptcy. If you are profitable at all in this market, be satisfied. When growth comes at the expense of profit, the deal is done.
Jon Skarimbas - 2008-11-24 14:53:00 EST
"Fundamentally sound". Lenox has not been viable or sound for years.
What manufacturers and retailers? Everything is made in the Orient,
imported and distributed in this country by "management" who doesn't
have a clue what the consumer wants. Regarding retailers, this
marketing segment is being operated by financial people, not
merchants. Pity the poor consumer who is looking for style, quality or
need. Oh, if you want to buy Lenox go to TJ's, Marshalls and Tuesday
Morning. My what a business plan.
Fred Schwartz - 2008-11-24 13:16:00 EST
What manufacturers and retailers? Everything is made in the Orient,
imported and distributed in this country by "management" who doesn't
have a clue what the consumer wants. Regarding retailers, this
marketing segment is being operated by financial people, not
merchants. Pity the poor consumer who is looking for style, quality or
need. Oh, if you want to buy Lenox go to TJ's, Marshalls and Tuesday
Morning. My what a business plan.
Mr. Pfefferle''s "business as usual" comment of assurance to employees, etc. is very nice. But when a bankruptcy is perceived (or perhaps foolishly "spun") as happening to a firm that is "fundamentally sound,", this is yet another clear sign how truly/madly/deeply troubled is our industry -- and, in fact, our country. Let''s hope the recent election will result in staffing/stocking our government with competence once again, instead of with incompetents who are "loyal." If so, that much-vaunted-but-as-yet-unseen trickle-down effect might apply not simply to a dollop of cash in our pockets, but to some good-old common sense that might eventually reach manufacturers, retailers and consumers.
James van Maanen - 2008-11-24 11:56:00 EST
Featured Company
Most Recent Resources
- Mattress Buying 101 - Connecting with Consumers
- Designing Your Brand’s Website for eCommerce
- Global Sourcing in 2010: Doing More With Less
- Comparing Four Options for Turning Web Site Traffic into...
- Design, Develop, Deliver: The Three D's to Digitally...
- Are You Prepared for the 2009 Holiday Season? A Branded...
VIEW ALL GALLERIES
