Hancock Fabrics has announced the company’s days of operations are numbered. According to the Leaf Chronicle, Hancock Fabrics has announced the closure of its 185 stores across the United States.
The fabrics and crafts retailer, founded in 1957 Tupelo, Mississippi, has revealed the decision to close its doors is due to bankruptcy. On Thursday, March 30 the United States Bankruptcy Court of Delaware approved the sale of the company’s assets to the Great American group. It has been reported that Hancock Fabrics has been acquired for approximately $65 million as Great American was quoted the “highest and best” offer by the court.
Scott Carpenter, president of Great American’s Retail Solutions division, has released a statement about the company’s acquisition of Hancock Fabrics, briefly detailing the circumstances around Hancock’s closure. “Our team has worked closely with Hancock Fabrics in a range of capacities over the years,” the statement read, according to DJournal.
“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.”
Store closures are reportedly set to begin immediately and liquidation is scheduled to begin as soon as possible, according to the publication. Thus far, Great American has already begun the closure process for approximately 70 Hancock Fabrics locations. The latest reports follow Great American’s Chapter 11 reorganization filing back in February. Hancock Fabrics initially hoped to attract a buyer that would be able to keep the company afloat but they were unable to sell for an adequate price.
“To maximize the value of the purchased assets, and to reduce the amount of post-debtor-in-possession financing borne by the debtors, it is essential that the sale occur within the time constraints set forth in the agency agreement, as extended by the bid procedures order. Time is of the essence in consummating the sale,” the order said.
Back in 2007, Hancock Fabrics filed for Chapter 11 reorganization in hopes of saving its 170 store locations. Great American actually helped liquidate those stores by providing a backup bid. The stores closing will consist of the sale of merchandise, furniture, store fixtures and other equipment. Since Great American now has sole control of Hancock Fabrics, the company is reportedly authorized to advertise signs that read, “going out of business,” ”store closing,” ”sale on everything,” ”everything must go,” or advertisements with similar themes.
As for Hancock Fabrics’ 4,500 employees that will be affected due to the store closures, Great American will reportedly determine which employees will remain with the company to assist with store closures. But, if Great American decides not to utilize any employees during the final closings and liquidation process, the company must give Hancock Fabrics a seven day notice. Key Hancock employees who have been with the company for a substantial amount of time will reportedly receive severance packages as a result of their long-term commitment to the company. If they opt not to quit before their store closes, they could receive up to ten percent of their base salary in a one-time, lump sum payment.
Many Americans are quite shocked about the closure of Hancock Fabrics, while others are not surprised due to the constant changes in the economy as some retailers are being phased out. How do you feel about the closure of Hancock Fabrics? Will you miss the store? Share your thoughts.