The remaining 185 stores of Hancock Fabrics will close, 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.
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Hancock Fabrics will be closing the rest of its stores
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.
Scott Carpenter, president of Great American’s Retail Solutions division said, “Our team has worked closely with Hancock Fabrics in a range of capacities over the years. Now,our task will be discounting all of the merchandise in the stores until it is completely liquidated. Loyal customers and the general public will be able to shop in the stores and receive significant savings on a wide variety of quality merchandise, just in time for their prom and bridal purchases. We expect the going-out-of-business sales to last several weeks before all of the merchandise is sold in the remaining locations.”
The bankruptcy court said the move to quickly liquidate the stores would “maximize the value of the purchased assets, and to reduce the amount of post-debtor-in-possession financing borne by the debtors … Time is of the essence in consummating the sale.”
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.