RoomStore, Inc. announces a voluntary chapter 11 petition, filed in Richmond, Virginia on December 12, 2011. RoomStore filed for reorganization as a continuation of efforts to improve its business plan. RoomStore has also secured a commitment from its current lender, Wells Fargo Bank, for a $14 million Debtor-In-Possession credit facility. The restructuring process will facilitate RoomStore's financial and operational plans, which are designed to restore the Company to long-term financial health.
The decision to file for re-organization comes after newly appointed Chief Executive Officer, Stephen Giordano, took the helm on November 14, 2011. A veteran industry leader with over thirty years in the furniture business, Giordano was brought in to execute the reorganization and turnaround of the business. The board of directors also named Steve Gidumal of Virtus Capital, as the company's new Chairman of the Board. The new board consists of Giordano, Gidumal and furniture industry expert Ron Kaplan.
"RoomStore is a viable and recognizable brand that is an established leader in the home furnishings industry. Our dedication to providing our customers with excellent value in home furnishings will provide a strong foundation as we grow and improve during restructuring," says Giordano.
RoomStore has engaged Lowenstein Sandler PC and Kaplan & Frank, PLC as counsel and periodic updates on the reorganization will be made available.
RoomStore currently has 63 stores and will continue to operate its stores in the ordinary course of business while completing its restructuring, and will also retain its interest in Mattress Discounters Group, LLC.
About RoomStore: RoomStore was started in 1992 by several members of the Levitz family in Dallas, Texas. A leader in the home furnishing industry, it currently operates 63 retail stores in the states of Alabama, Florida, Maryland, North Carolina, Pennsylvania, South Carolina, Texas, and Virginia. RoomStore is a 65% shareholder in Mattress Discounters Group, LLC ("MDG"). Its MDG segment operates 79 bedding stores in the states of Alabama, Virginia, Maryland, the District of Columbia, and Delaware. Visit the company at www.roomstore.com for more information.