Gadzooks, Inc. has filed for bankruptcy protection in the Northern District of Texas. This move was necessary in order to provide time to complete the reorganization of its core business around 252 stores chosen to strengthen its market position in the junior apparel business. In addition to 31 stores currently being liquidated, approximately 125 additional stores will be liquidated in the coming weeks. In addition to the store closings, approximately 65 corporate and field overhead positions will be eliminated to streamline the cost structure of the company.
“We regret that this action was necessary after so many years of successful results,” commented Jerry Szczepanski, Chairman and Chief Executive Officer of Gadzooks, “but our transition to an all-girl format now requires us to concentrate our resources on the continuing improvement of our concept.”
Carol Greer, Interim President and Chief Merchandising Officer, further commented, “We are excited about the progress of our concept, and we expect good results through our spring season as we focus on our core destination apparel businesses and swimwear, appealing to the fashion-conscious junior customer.”
Gadzooks has reached an agreement in principle with its primary secured lender, Wells Fargo Retail Finance LLC, to provide a DIP financing package, subject to final documentation.
