Following last week’s announcement that the Joseph-Beth Booksellers stores in Charlotte, N.C., and Pittsburgh will close by year’s end, the Joseph-Beth Group filed for Chapter 11 bankruptcy protection on Thursday in U.S. Bankruptcy Court in the Eastern District of Kentucky.
The Joseph-Beth store in Cleveland and the Davis-Kidd Booksellers in Nashville will also close. “Davis-Kidd has been an institution in Nashville. It breaks my heart to have to close this store,” said Joseph-Beth Group owner Neil Van Uum.
The retailer blamed the continuing challenges in the book industry and a weak economy for the closures and reorganization. Pre-petition, the Joseph-Beth Group operated eight stores and a health and wellness niche bookstore in the Cleveland Clinic in Cleveland. It will continue to operate the Clinic store, along with Joseph-Beth locations in Lexington, Cincinnati, and Fredericksburg, Va., and Davis-Kidd in Memphis. Approximately 29 part-time and 65 full-time booksellers will be affected by the four store closings.
Joseph-Beth has secured DIP (Debtor-in-Possession) financing and anticipates little impact on day-to-day operations in the remaing stores. In a press release, it noted that DIP financing, if approved by the Court, combined with the company’s cash from operations will provide sufficient liquidity to pay expenses moving forward, including trade and employee obligations.
The company owes $5.76 million to its top 30 creditors. Ingram, the largest creditor, is owed over $3.5 million, followed by Random House with $224,800 and HarperCollins and Baker & Taylor Entertainment with roughly $194,700 each.
