Gracious Home Files for Chapter 11 Bankruptcy for the Second Time

by San Antonio Attorney

Furnishing retailer Gracious Home filed for Chapter 11 bankruptcy one month after its store in Chelsea was closed.  This is the second bankruptcy filing of the upscale houseware chain in New York.

The retailer has a total of three stores in Manhattan; the two are located in Upper West and Upper East sides.

The 53-year-old chain, which claims to possess a “timeless New York elegance,” stated in the bankruptcy filing that although there is still remaining business, it has reduced significantly.

Court filing shows that Gracious Homes’ top creditors are its landlords.

According to reports, leases were a major factor in the store’s bankruptcy in 2010.  This time around, the majority of its financial obligations are to its vendors.  The retailer reportedly owes $6 million to creditors.

Gracious Homes’ was estimated to generate $43 million of sales in 2016, less than 20 percent from the previous year, according to the bankruptcy court filing.

Gracious Homes’ CEO Robert Morrison said the chain’s financial problems were mainly caused by the increasing number of consumers purchasing online and tougher rivalry from big-box retailers like Bed Bath & Beyond.  The New York retailer has also been in disagreement with its senior lender, Signature Bank, which has ceased providing financial support to Gracious Homes.

Morrison said the chain lost $2 million in 2015, and is expected to suffer a $4 million loss in 2016.

When the chain filed for bankruptcy in 2010, investment group Americas Retail Flagship Fund LLC was in control.

Gracious Home is asking the bankruptcy court’s approval to utilize its lenders’ money to continue operating throughout the bankruptcy case.  Its 111 employees were notified of possible layoffs, and the company hopes to keep a fraction of their employees after the business reorganization, Morrison said.

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