US-based home furnishings and décor retailer Z Gallerie has filed voluntary petitions to restructure under Chapter 11 of the United States Bankruptcy Code in the District of Delaware.
Subject to court approval, the retailer anticipates to have access to $28m in debtor-in-possession (DIP) financing facility from its existing lender, KeyBank National Association.
Along with the company’s cash from operations, the DIP financing is expected to offer up to $8m in incremental liquidity. This will provide enough liquidity for the retailer during the Chapter 11 process to continue operations.
Z Gallerie CEO Mark Weinsten said: “We are pleased to have reached this agreement with KeyBank that will enable Z Gallerie to continue to execute its strategy and position itself for long-term success.
“Z Gallerie has made significant progress on improving all facets of our operations, enhancing our customer service and scaling our e-commerce presence. Upon emergence, we will have a stronger balance sheet and the financial flexibility needed to compete in today’s dynamic retail environment now and for the long term.”
The company expects the Chapter 11 procedure to last for four months and will continue to operate its online and offline stores.
Under the restructuring, the retailer has also filed a motion with the court seeking approval to close 17 stores.
Weinsten added: “We look forward to emerging from this process as quickly as possible and greatly appreciate the ongoing support of our employees, customers, suppliers and landlords. Their continued backing has been, and will continue to be, an integral factor in our success.”
Headquartered in Los Angeles, Z Gallerie currently operates 76 stores across the US and has an online platform called zgallerie.com.