“Ultra Stores to close 12 locations”

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Ultra Stores to close 12 locations

Posted: 17 Aug 2010 09:27 PM PDT

By Michelle Graff

April 15, 2009

Ultra Stores, which filed for Chapter 11 bankruptcy protection on April 9, will close stores in the following locations: Johnson Creek and Appleton, Wisc.; Riverhead and Deer Park, N.Y.; San Diego and Gilroy, Calif.; South Windsor, Conn.; Kittery, Maine; and St. Augustine, Fla.

New York--Ultra Stores Inc., the 181-unit chain that filed for Chapter 11 bankruptcy protection last week, will close a dozen underperforming stores in six states and two territories as the chain moves forward with its plan to reorganize and emerge from bankruptcy.

According to an affidavit filed in the case in U.S. Bankruptcy Court for the Southern District of New York, Ultra "has determined that some of their stores are underperforming and must be closed," and is employing Hilco as its exclusive agent to run store-closing sales.

Targeted for closing are the stores in Johnson Creek and Appleton, Wisc.; Riverhead and Deer Park, N.Y.; San Diego and Gilroy, Calif.; South Windsor, Conn.; Kittery, Maine; and St. Augustine, Fla., according to court documents.

In addition, court documents show Ultra will be closing two stores in Puerto Rico and one on St. Thomas in the U.S. Virgin Islands.

Chicago-based Ultra, which operates Ultra Diamonds and Premier Fine Jewelry stores as well as the licensed fine-jewelry departments in Burlington Coat Factory, Filene's Basement and Daffy's, filed for Chapter 11 bankruptcy protection on April 9.

An affidavit filed in the bankruptcy court by Ultra Stores President and Chief Executive Officer Daniel H. Marks says the weak retail climate and a lack of liquidity forced Ultra into Chapter 11. The factors cited were similar to those cited by other retail jewelry chains that have filed for bankruptcy this year.

The affidavit states that Ultra's troubles started during the 2007 holiday season and only grew worse in 2008.

"The weakness Ultra experienced in December 2007 continued through the first half of 2008, and its sales, like those of most other retailers, declined precipitously as macroeconomic conditions worsened during the second half of the year," the document states.

Same-store sales for the fiscal year ended Feb. 1, 2009 were down 10.8 percent, including a decrease of 18.9 percent during the holiday season in November 2008 and December 2008, court documents said.

Despite slow sales, Ultra is attempting to reorganize and emerge from bankruptcy.

The next step in the case, according to Michael O'Hara, a managing member and chief executive officer at Consensus Advisors, the Boston-based investment banking and strategic advisory firm that has been retained as a financial advisor in the case, is the formation of the creditors' committee, which is slated for Friday.

He said Ultra aims to have it reorganization plan filed around the end of the month.