Dots approved for bankruptcy auction

Women's clothing retailer Dots is preparing to shut down its nearly 360 stores starting March 1. At a court hearing on Friday, Feb. 21, Gordon Brothers Group, a liquidator, has been named the lead bidder to buy the chain and handle the liquidation.

Gordon Brothers will present its liquidating bid for Dots on Wednesday during an auction for the chain. Competing bidders have until Tuesday to put in rival offers for the stores.

According to court documents, Gordon Brothers officials would manage store-closing sales. Under the deal, Gordon Brothers will also remit payment to Dots for 40 percent of the retail value of all merchandise in stores and in the company's distribution center in Ohio.

Gordon Brothers has previously handled the liquidations for Daffy's and Betsey Johnson's stores.

Dots announced on Jan. 21 that it had filed for bankruptcy protection, citing prior management shortfalls, a rough economy and expensive store leases. At the time, the company said it would only be closing 30 store locations in an effort to shed assets and other expenses. Dots said in its Chapter 11 filing in Newark, New Jersey, that it was running low on cash and unable to pay many of its debts. The company planned to use the Chapter 11 process to borrow money and to reject the leases for unprofitable stores.

The retailer is the second to cite severe financial challenges this year behind Loehmann's which filed for bankruptcy in December and is going out of business.

For more:
-See this Wall Street Journal article

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