National Stores initiated a court-supervised restructuring with the support of its lenders and suppliers integral to the business. As part of the restructuring, the company will be closing 74 of its 344 stores.
According to documents filed during first day motions, Encina Business Credit has agreed to provide up to $108 million DIP financing.
The company filed voluntary petitions for Chapter 11 relief in the U.S. Bankruptcy Court for the District of Delaware.
National Stores is working with its vendors, lenders and other creditors on a consensual plan of reorganization.
“National Stores, historically a profitable company, is committed to improving its financial health and returning to profitability. Our goal is to emerge a reorganized company poised to compete in an evolving industry so that we can continue to serve the communities where we are rooted,” said Michael Fallas, National Stores CEO.
Like many retail concerns, National Stores has suffered financial setbacks from certain under-performing stores. This has been exacerbated by severe weather in various regions, such as Hurricane Maria, resulting in the prolonged, temporary closure of damaged stores and loss of revenue. The company suffered further financial losses resulting from the acquisition of Conway Stores. The strain on liquidity was worsened by the aftermath of the company’s data breach as access to operating funds diminished.