Dots is going out of business and has officially begun liquidating all merchandise at its 360 stores across the U.S. The company reached a deal with Gordon Brothers Group, a liquidation firm, to execute the final sale.
The decision to move forward with the going out of business sale was made on Thursday at a U.S. Bankruptcy Court in Newark, N.J. Gordon Brothers was selected because it was the only firm that would take over the chain's operations out of the 268 potential buyers who were contacted.
Gordon Brothers has previously handled the liquidations for Daffy's and Betsey Johnson's stores. The firm will remit payment to Dots for 48.5 percent of the retail value of merchandise in the closing stores and Dots' distribution center.
Dots employs 3,500 people in its stores and Glenwillow, Ohio headquarters. The home office and warehouse in Glenwillow occupy 193,000 square feet, according to court documents.
Dots filed for bankruptcy protection on Jan. 20 after years of being plagued by 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 revealed in its Chapter 11 filing 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.
Dots is the second retailer to go out of business this year behind Loehmann's which filed for bankruptcy in December and closed its remaining stores for good last week.
-See this Wall Street Journal article
Loehmann's last stores close for good
Dots approved for bankruptcy auction
Dots files for Chapter 11 bankruptcy, closes 30 stores
Loehmann's announces closure of all stores
Loehmann's assets, leases sold at auction