Vann's bankruptcy switching to liquidation
MISSOULA, Mont. (AP) — Vann's Inc., the appliance and electronics store that filed for bankruptcy last month to reorganize its finances, asked the court to convert the bankruptcy to a liquidation and has given its Missoula employees 60-day layoff notices.
"We've been trying to restructure under Chapter 11 and we have an obligation to let the judge know that unless somebody is willing to put in $3 million to $5 million for inventory, we can't do it," Jerry McConnell, Vann's chief executive officer, told the Missoulian (http://bit.ly/T8h1Hu ) on Wednesday. "So we are requesting conversion to orderly liquidation under Chapter 11."
Federal law requires businesses to give a 60-day closure notice if they have more than 50 employees. Vann's has about 150 employees in six stores, including 85 in Missoula. The stores in Kalispell, Hamilton, Bozeman and Billings along with a warehouse in Lolo also will be closed. The Helena store closed earlier this year.
The company secured some financing after filing for bankruptcy on Aug. 5, but McConnell said sales weren't strong enough to continue.
"Two or three years ago, one-third of our sales were flat-screen TVs," McConnell said. "Now, 80 percent of that market is saturated. Household incomes are back to 1995 levels. People aren't splurging on things like they have in the past. Our appliance sales come because the washing machine broke and you need one, not because of new house sales."
Vann's stores will remain open while the company submits its liquidation plan to a bankruptcy judge. McConnell said he expects a decision by Oct. 2 and said the stores could be closed by the end of November.
"We won't be doing any big liquidation sale until we get through the process with the court," McConnell said. "And we won't do anything crazy. We're still obligated to deliver certain earnings. We can't go sell everything for $50 and get rid of it."
The company's Chapter 11 petition said it owes between $10 million and $50 million to between 1,000 and 5,000 creditors. It lists more than $17 million in company assets.
McConnell was hired in June after CEO George Manlove stepped down.
Vann's was founded in Missoula in 1961 as an appliance store. It added electronics and opened retail stores across the state. It also has an e-commerce site at vans.com. Vann's became a 100 percent employee-owned company in 2005.
Vann's online sporting goods outlet, BigSkyCountry.com, is close to being sold and is not part of the bankruptcy, McConnell said.
Information from: Missoulian, http://www.missoulian.com