Tuesday, Sept. 10, 2002 | 11:17 a.m.
SUN STAFF AND WIRE REPORTS
Warnaco Group Inc. is asking a federal bankruptcy judge to approve its plan to close 26 Calvin Klein outlet stores -- including two in the Las Vegas area -- and liquidate the inventory.
Warnaco, the maker of Calvin Klein jeans, Speedo swimsuits and Olga bras, filed for Chapter 11 protection in June 2001, hurt by the slowing economy and heavy debt from acquisitions and licensing agreements. The New York-based clothing company is selling assets in a bid to reorganize and come out of bankruptcy.
In court papers filed Friday, the company asked U.S. Bankruptcy Judge Richard L. Bohanon in Manhattan for permission to close the Calvin Klein outlets in 13 states, saying the stores are either unprofitable or "marginally performing."
After analyzing the financial performance of the stores, Warnaco "determined that their continued operation is no longer justified," Warnaco said in the court filing.
The company said holding going-out-of-business sales at the stores during the holiday season "will maximize the ultimate return on their assets." Warnaco said it hopes to find a liquidator at a planned auction to start the store-closing sales in October.
The Calvin Klein outlet stores to be closed include seven in California, four in New York, three in Florida, two each in Nevada and New Jersey and one each in Alabama, Colorado, Connecticut, Georgia, Maine, Massachusetts, Oregon and Texas. The closing plan doesn't include Warnaco's Speedo Authentic Fitness stores, the filing said.
Local managers of the two Nevada stores at the Belz Factory Outlet mall in Las Vegas and at the Fashion Outlets of Las Vegas mall in Primm, south of Las Vegas on the California border, said today they are unaware of any plans to close the two stores.
The company closed 25 Warner's, Olga and Warnaco outlets last spring. Warnaco said earlier that it plans to restructure into three separate product groups: sportswear, intimate apparel and swimwear. Chief Executive Officer Tony Alvarez has said he's exploring the sale of some brands or the entire company.
In January, Bohanon approved the sale of Warnaco's Penhaligon's fragrance division for $11 million to Royal Holdings Inc., and the sale of Warnaco's sleepwear business for $10.1 million to Luen Thai Overseas Ltd.
Warnaco shares, which sold for more than $43 in June 1998, traded recently at 13 cents.
A hearing on Warnaco's plan to close the outlets is scheduled for Sept. 17.
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