A’Gaci looks to leave bank­ruptcy

Houston Chronicle - - BUSINESS - By Pa­trick Dan­ner pdan­ner@ex­press-news.net

San An­to­nio-based A’Gaci, the women’s fash­ion and ac­ces­sories re­tailer, is mov­ing to­ward emerg­ing from bank­ruptcy.

A’Gaci this week re­ceived bank­ruptcy court ap­proval to en­ter into a com­mit­ment let­ter for up to $12 mil­lion in fi­nanc­ing from a Bos­ton lender.

“It’s crit­i­cal for the debtor to ob­tain exit fi­nanc­ing in order to emerge from Chap­ter 11,” Ian Peck, an A’Gaci bank­ruptcy lawyer, said at a Tues­day court hear­ing be­fore Chief U.S. Bank­ruptcy Judge Ron­ald King ap­proved the re­quest.

Peck de­clined to com­ment after the hear­ing, di­rect­ing ques­tions to A’Gaci co-founder David Won.

A’Gaci filed for bank­ruptcy pro­tec­tion in Jan­uary, blam­ing its prob­lems on a failed ex­pan­sion, hur­ri­canes last year af­fect­ing its most prof­itable stores, and the de­layed im­ple­men­ta­tion of an in­ven­tory man­age­ment sys­tem. It had $82.9 mil­lion in as­sets and $62.1 mil­lion in li­a­bil­i­ties the day it filed for bank­ruptcy, a court fil­ing in­di­cates.

A’Gaci sought to re­or­ga­nize after it can­celed an auc­tion of its as­sets in March when it re­ceived no qual­i­fied bids.

The re­or­ga­ni­za­tion plan calls for A’Gaci to exit bank­ruptcy as a leaner or­ga­ni­za­tion, with fewer stores and a smaller dis­tri­bu­tion fa­cil­ity. The com­pany closed more than 20 stores it says were un­prof­itable and ex­pects to op­er­ate 55 stores go­ing for­ward.

David Hop­per

San An­to­nio-based A’Gaci’s bank­ruptcy fil­ing came in Jan­uary.

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