Robbins Brothers, a 16-store California-based chain with locations in San Diego, Houston, Dallas, and Chicago, has filed a Chapter 11 petition in U.S. Bankruptcy Court for the District of Delaware.
The company’s papers said it plans a sales and auction of its assets. It already has an agreement with stalking horse bidders Spence Diamonds, a Vancouver, Canada-based chain of diamond and jewelry stores, for its Houston-area and Chicago-area assets. The rest is planned to be purchased by Robbins Brothers Jewelry, an affiliate of Weston Presidio Capital, an equity firm which already has a 49 percent stake in the company, and Dorset, another minority equity holder.
The company, in a statement, said its main senior lender, Wells Fargo Bank, N.A., supports these transactions, subject to an overbidding process.
According to a filing by Bruce Ross, chief financial officer, the company’s net sales in 2008 were $103.71 million, but it incurred a $6.4 million loss.
The filing said its financial condition began deteriorating in 2008, and was impacted by the deteriorating economy and costs associated with its expansion.
Top trade creditors include Leo Schachter Diamonds, Moshe Namdar, R and R Grossbard, and Simon G. Jewelry. The company estimates it owes $15 million in accounts payable. It estimates the book value of its assets to be $66 million and its liabilities to be $77 million.
“Filing under Chapter 11 was the best way for Robbins Bros. to accomplish these transactions for the benefit of the company’s customers, employees, suppliers, and business partners, and to ensure that the company’s creditors are treated fairly, Andy Heyneman, president of Robbins Brothers, said in a statement. “During this process, the company’s business and operations will continue as usual, and customers can be assured that Robbins Bros. will continue to offer exceptional products and service to its customers.”