USA Discounters, a Norfolk, Va.–company that owns seven-store chain Fletcher’s Jewelers, filed for Chapter 11 on Aug. 24 and plans to wind down operations.
According to documents filed in Delaware federal court, the company’s sole business is currently Fletcher’s Jewelers, a credit-oriented jeweler with seven mall-based stores in five states.
“USA Discounters is still evaluating the available options with respect to the remaining Fletcher’s Jewelers stores and related inventory,” said a declaration by USA Discounters vice president Timothy W. Dorsey.
Other businesses that sold electronics and other items closed prior to the filing, it said.
Dorsey said the company, which has traditionally serviced members of the military, was hurt by changes in the service member payment system as well as by military cutbacks sparked by budget sequestration.
It has also coped with a series of investigations from several state attorney generals and the Consumer Financial Protection Bureau targeting its business practices. Last August, it settled with the CFPB over a $5 fee it charged for credit services. The CFPB said the promised services did not exist and the fee’s wording misled customers. USA Discounters admitted no wrongdoing but agreed to refund the charges and pay a $50,000 penalty.
Dorsey also blamed negative press and the competitive retail climate for its filing.
In September 2014, USA Discounters changed its store brand name to USA Living “to reflect the fact that USA Discounters is not a discount store chain and has not operated as one. The decision to change the brand name was completely voluntary and was neither the result of any investigation nor the result of any bad press about the old brand name,” Dorsey said.
The company is privately owned by two investment funds: Parallel Big Wheel Investco and Slone Management.
A media contact for Fletcher’s Jewelers did not return a request for comment.
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