Hancock Fabrics, Inc., a leading retailer in fabric, sewing and accessories, announced that it and its wholly-owned subsidiaries have filed voluntary petitions for reorganization under chapter 11 of the U.S. Bankruptcy Code. The Company filed the petitions in the United States Bankruptcy Court for the District of Delaware (the "Bankruptcy Court"). The Company believes that the restructuring will allow it to become more competitive in today's retail market, both in stores and online. The Company intends to use the filing to reorganize its capital structure and gain access to liquidity, reduce costs and liabilities, optimize its store operations and locations to meet customer demands and create the most value for stakeholders. The Company is considering all possible options for maximizing stakeholder value, including the sale of the business as a going concern in either a single transaction or a series of transactions. It is also reviewing investment options with existing stakeholders and third parties.
The Company has taken this necessary step to reorganize its financial and operational structure to position itself for optimal growth. As part of the restructuring process, the Company intends to implement a comprehensive program to enhance its customer experience by increasing the availability of associates, in-store classes and training. The Company also intends to feature an enhanced e-commerce presence. The Company will continue to offer an interactive online community, a wide variety of unique merchandise and quality customer service.
"We believe the restructuring is a positive step for the future of the Company and we are committed to providing our customers quality fabrics and crafting essentials, both online and in stores. We value our relationships with our vendors and appreciate their support throughout this process. We will continue to offer the same unparalleled service for which the Company has been known since its founding in 1957," said Steve Morgan, President and Chief Executive Officer.
During the restructuring process, the Company plans to continue to operate its business as usual and to fulfill customer orders and pay vendors. The Company has filed with the Bankruptcy Court, and anticipates receiving approval of, customary motions to allow the Company to make certain necessary payments to employees and vendors that will ensure continued operations through the restructuring and beyond.
The Company currently operates more than 250 retail stores in 37 states and an Internet store at the website www.hancockfabrics.com.