Discount clothing chain Goody's Family Clothing will begin liquidating its stores on Friday as the retailer becomes one of the year's first victims of the worsening economy.
The move, which comes less than four months after the privately held retailer emerged from Chapter 11 bankruptcy protection, affects the Knoxville, Tenn.-based chain's 287 stores scattered throughout 20 Midwestern and Southern states, said Cathy Hershcopf, a partner at Cooley Godward Kronish LLP.
The firm is working with Goody's vendors and its parent, PGDYS Lending LLC.
It's uncertain what will happen to the company's 9,800 workers after the liquidation _ being handled by a joint venture between Gordon Brothers Retail Partners LLC and Hilco Merchant Resources LLC _ is completed by the end of March. But without a last minute buyer or an investor to purchase high-performing stores, their job outlook is grim.
"I think every retailer experienced a great deal of pressure this holiday season because of the lack of consumer confidence," Hershcopf said. "But undercapitalized companies like Goody's experienced more pressure from their lenders and from their vendors."