NEW YORK — The owner of the Mandee, Annie Sez and Afaze clothing stores cited effects from Superstorm Sandy as it sought Chapter 11 bankruptcy protection Monday.
Big M Inc., of Totowa, N.J., filed the petition in U.S. Bankruptcy Court in New Jersey. It said in an emailed statement it intends to continue to operate its stores and expects to "emerge as a stronger company."
Court papers, however, state that the company "intends to consider all strategic options to maximize the value of its business and properties," language often seen as an indicator that a sale of the business is possible.
The family-owned retailer said in the court filing that it started a restructuring process in November 2011, after the economic downturn eroded its business and left it unprofitable. It cut expenses, refinanced debt, renegotiated leases, sold property and closed 27 underperforming stores in 2012.
Court papers said those steps had put it on a path toward profitability when Sandy hit. The late October storm closed most of its stores in in New Jersey, New York and Connecticut for a week or more, along with its offices and distribution center. Three stores were shuttered for a month and continue to operate on a limited basis.
Big M said it depleted its resources in getting its stores back into operation but business never rebounded. The company also said in the filing that it hasn't collected from its insurance carrier, in part because of a disagreement over the amount owed by Westport Insurance Corp., a unit of Swiss Re America Holding Co.
Westport said in an emailed statement it was having ongoing talks with Big M following the storm and was "committed to promptly and fairly resolving Sandy related claims."
The bankruptcy filing claims the combination of the reduced business and the lack of insurance payments left Big M without the needed cash to operate, especially during the critical holiday period. Clothing retailers typically take in more than 20 percent of their annual sales during the holiday period, according to the National Retail Federation.
Big M estimated revenue for 12 months ending Jan. 26 will be about $192 million. It reported debt of about $15 million.
The company said it has an offer for up to $13.2 million in credit to see it through the bankruptcy process arranged through Salus Capital Partners, which helped finance the 2011 restructuring.
Mandee, an off-price clothing retailer, caters mainly to young women. Annie Sez and Afaze appeal to slightly older female shoppers.
Big M, founded in 1948, operates 129 stores in eight states and employs about 1,200 workers, including roughly 490 full-time employees. About 250 of its staffers are unionized.
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At least 30 people were reported killed in eight states along the eastern seaboard by Sandy, which dropped just below hurricane status before making landfall on Monday night in New Jersey. Some people were hit by trees, others died in flooding, from electrical shocks or in car crashes linked to the storm. One woman in Toronto was hit by flying debris. Sandy killed more than 65 people in the Caribbean last week before pounding U.S. coastal areas. President Barack Obama issued federal emergency decrees for "major disasters" in New York and New Jersey. <a href="https://editorial.huffingtonpost.com/tmp/2045324_45.html?preview=yes">Via Reuters</a>
More than 1 million people in a dozen states along the storm's path were ordered to evacuate, as homes sunk underwater and fierce winds toppled trees. The Red Cross estimated its shelters housed more than 11,000 people across 16 states. New York City Mayor Michael Bloomberg said the city's shelters housed 6,100 people. The city said shelters would remain open until residents can safely return to their homes. <a href="https://editorial.huffingtonpost.com/tmp/2045324_45.html?preview=yes">Via Reuters</a>
Power And Telecom Outages
More than 8.1 million homes and businesses on the East Coast of the United States were without power on Tuesday after the storm tore down power lines, flooded networks, and sparked an explosion at a power station on Manhattan's East River. That compares to 8.4 million outages at the peak of Hurricane Irene last year. The outages spread from New Jersey, which was hardest hit, to 19 other states from North Carolina to as far inland as Indiana. Power companies estimate parts of New York City could be without power for more than a week. An additional 145,000 people lost power in the Canadian province of Ontario. The storm disrupted cellphones, home telephones and Internet services in at least eight states in the northeast. <a href="https://editorial.huffingtonpost.com/tmp/2045324_45.html?preview=yes">Via Reuters</a>
Flooding And Fires
New Jersey was the worst hit. Three towns in New Jersey just west of New York City were inundated with up to 5 feet (1.5 metres) of water after a levee on the nearby Hackensack River was overtopped or breached. Seaside rail lines washed away, floodwaters forced police and fire departments to relocate their operations, and parts of the coast remained underwater. In New York City, neighborhoods along the East and Hudson rivers in Manhattan were underwater, as were low-lying streets in Battery Park near Ground Zero, where the World Trade Center once stood. The total area flooded by the storm is still unknown. The unprecedented flooding hampered efforts to fight a massive fire that destroyed more than 80 homes in the New York City borough of Queens. Mayor Michael Bloomberg said there were at least 23 serious fires across the city. <a href="https://editorial.huffingtonpost.com/tmp/2045324_45.html?preview=yes">Via Reuters</a>
Transportation ground to a halt along the U.S. Northeast coast starting from Monday, stranding local rail commuters, air travelers and cruise passengers from as far away as Europe and Asia, as Sandy prompted closure of air, rail, ship and even highway service. The transport woes also hit cargo operations. New York closed seven major bridges. New Jersey closed one of its busiest toll roads due to flooding. More than 15,773 flights have been canceled so far as a result of Sandy, according to the flight tracker FlightAware. A tidal surge paralyzed New York City's subway system, the nation's largest, in the worst disaster to strike it in its 108-year history. The Metropolitan Transportation Authority said it could take up to four or five days to get the water out of the flooded train tunnels. Mass transit was also shut on Monday and part of Tuesday in Philadelphia and Washington. The Boston public transportation system reopened on Tuesday morning. <a href="https://editorial.huffingtonpost.com/tmp/2045324_45.html?preview=yes">Via Reuters</a>
The storm interrupted the presidential campaign a week before Election Day, forcing President Barack Obama and his Republican challenger, Mitt Romney, to cancel appearances. Sandy added a new level of uncertainty to an already tense, tight race for the White House. Obama will stay in Washington on Wednesday after canceling a third campaigning day. Obama, who has made every effort to show himself staying on top of the storm response, drew praise from Republican New Jersey Governor Chris Christie, who has been a strong Romney supporter. Romney converted what had been intended as a campaign event in Kettering, Ohio, on Tuesday into a "storm relief event." He urged Americans to show generosity in helping the East Coast. <a href="https://editorial.huffingtonpost.com/tmp/2045324_45.html?preview=yes">Via Reuters</a>
The monster storm closed U.S. stock markets for two days this week, the first time markets had consecutive unplanned closures due to weather since a massive blizzard shut them down in 1888. The unplanned closure on Monday was the first since the Sept. 11, 2001, attacks. Bond markets were also shut on Tuesday. Some analysts estimated banks and trading firms could lose tens of millions of dollars in revenue. Major U.S. stock exchanges expect to reopen on Wednesday. The storm delayed several data releases, such as the monthly natural gas report and the weekly Crop Progress report. Dozens of U.S. companies postponed releasing quarterly results after the storm, and banks closed branches in the Northeast, while promising to waive certain fees in hurricane-threatened areas. <a href="https://editorial.huffingtonpost.com/tmp/2045324_45.html?preview=yes">Via Reuters</a>
The second-largest refinery on the U.S. East Coast has suffered flooding and a power outage from Sandy, while two smaller plants also lost power, and glitches threaten to slow the recovery in fuel supplies. While the region's biggest plant, in Philadelphia, and several others were ramping up operations after escaping damage, other facilities, pipelines and terminals were struggling to restore supplies that had slowed to a trickle. <a href="https://editorial.huffingtonpost.com/tmp/2045324_45.html?preview=yes">Via Reuters</a>
Sandy appears to have caused more losses than last year's Hurricane Irene, but final totals will be hard to come by for some time because of the scale of the disaster. One disaster-forecasting company predicted economic losses could ultimately reach $20 billion, only half insured. That would make Sandy the fifth-worst hurricane in history, based on inflation-adjusted losses. <a href="https://editorial.huffingtonpost.com/tmp/2045324_45.html?preview=yes">Via Reuters</a>
Government And Schools
Federal government offices in Washington, which was spared the full force of the storm, were closed for a second day on Tuesday, and schools were shut up and down the East Coast, including New York and Boston. <a href="https://editorial.huffingtonpost.com/tmp/2045324_45.html?preview=yes">Via Reuters</a>