NEW YORK - Samsonite Co. Stores, the US retail division of luggage-maker Samsonite Corp., sought bankruptcy protection from creditors, citing a decline in demand for travel gear.
The company, based in Mansfield, Mass., yesterday listed $233 million in assets and $1.5 billion in debts as of July 31 in US Bankruptcy Court in Wilmington, Del.
“The recession has caused a severe decline in consumers purchasing travel-related goods and the company has responded to this critical situation with a substantial restructuring,’’ Kyle Gendreau, Samsonite’s chief financial officer, said in a statement.
The parent corporation reported $1.07 billion in revenue for fiscal 2007. The unit in bankruptcy has 173 leased retail stores in 38 states and employs about 650 people. The company was acquired by London-based CVC Capital Partners Ltd. for about $1.7 billion in October 2007. Samsonite Corp. did not file for bankruptcy protection.
US Bankruptcy Judge Peter Walsh gave the company permission to use cash earmarked to pay its lenders, allowing it to keep operating as it reorganizes. The lenders agreed to the use prior to the bankruptcy filing, according to court documents.
Walsh scheduled a hearing for Sept. 10 for court approval of a pre-bankruptcy agreement with Hilco Merchant Resources LLC to conduct store-closing sales. Under the agreement, Samsonite is guaranteed a recovery of 105 percent of the collective cost value of the merchandise to be sold.
The 20 largest creditors without collateral backing their claims are owed a total of $920,301, court papers show.