The remaining 185 stores of Hancock Fabrics will close, according to Dennis Seid of the Northeast Mississippi Daily Journal, bringing an end to the fabrics and crafts retailer that was founded in Tupelo in 1957.
On Thursday, the U.S. Bankruptcy Court in Delaware approved the sale of the stores to Great American Group, which had offered about $65 million for the company’s assets.
Great American was deemed to have the “highest and best” offer by the court.
The store closures have begun, and procedures have been put in place, allowing their liquidation to begin as soon as possible. The company website already has “Going out of business” prominently displayed.
“To maximize the value of the purchased assets, and to reduce the amount of post-debtor-in-possession financing borne by the debtors, it is essential that the sale occur within the time constraints set forth in the agency agreement, as extended by the bid procedures order. Time is of the essence in consummating the sale,” the order said.
Great American already had begun the process of closing 70 stores identified as under-performing locations by Hancock, which filed for Chapter 11 reorganization in early February.
Hancock and its creditors had hoped to attract a bidder that would keep the company running, but were unable to do so.
Great American, which had helped Hancock liquidate more than 170 stores during Hancock’s 2007 Chapter 11 reorganization, had provided a back-up bid.
The store closing sales will include merchandise as well as furniture, fixtures and equipment. Great American is allowed to abandon any site in “broom-clean” condition after the liquidation sales period.
In addition, Great American is authorized to advertise the liquidation sales as a “going out of business,” “store closing,” “sale on everything,” “everything must go” or similar-themed sale, the court said.
Great American also will have the final say on which Hancock employees it will keep to help with the store closings. The court order says they will remain Hancock employees, but if Great American decides not to use an employee, it must give Hancock a seven-day notice.
Prior to its Chapter 11 filing in February, Hancock employed about 4,500 people at its stores.
Great American also will pay retention bonuses to key employees, up to 10 percent of base salary, who don’t voluntarily leave or are terminated for cause.
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