Winning bidders marketing Wickes leases
By Clint Engel -- Furniture Today, March 17, 2008
Wilmington, Del. — The stalking horse bidder on the leases of Wheeling, Ill.-based Wickes Furniture won court approval last week for lease designation rights, clearing the way for the properties to be marketed to furniture industry players and others.
The winning bidders are RCS Real Estate Advisors, Hudson Capital Partners, Crystal Capital Fund and Julius M. Feinblum Real Estate. According to court documents, the joint venture will pay at least $3.5 million for the lease rights. The Wickes estate also could share in the profits on future lease assignments.
With stores in greater Chicago, Los Angeles, Las Vegas and Portland, Ore., Wickes filed for Chapter 11 bankruptcy protection Feb. 3, after a failed attempt to get suppliers to accept deferred payment terms. Without a bidder stepping in to keep the business up and running, the court approved the liquidation of the Top 100 chain.
Ivan Friedman, president and CEO of RCS, said his group of investors already has started marketing the properties, which include 44 stores and four distribution centers. He said the process should be concluded in four to five weeks, and that acquirers of the leases would likely take over the spaces after going-out-of-business sales, which are expected to run through April or mid-May.
Friedman couldn't say how many properties could be leased that quickly, but said, "Most of these are very valuable leases and some already are spoken for." He declined to say who has expressed interest.
Julius Feinblum, chairman of Julius M. Feinblum Real Estate, said his firm is marketing the properties to both furniture and non-furniture retailers. He said he anticipates about 30% of the leases will stay in the furniture industry.
"With the capabilities of RCS being one of the largest non-furniture real estate consultants and our very strong financial position with the partnership (of investors) we feel that we can maximize the value of these properties," said Feinblum.
Asked where furniture retailers were most likely to take stores, he said, "They're all good markets," adding that Los Angeles is especially appealing with the recent exit of Levitz before Wickes. He also said Portland has remained a strong market despite the weakening national economy.
Wickes was owned by private equity firm Sun Capital Partners, which has seen its share of troubles at retail lately. Earlier this year, one of Sun's first industry buys, Nationwide Mattress and Furniture Warehouse, began GOB sales. Two other retailers, Sun-owned Lillian Vernon and Sharper Image, where Sun was the largest shareholder, filed for Chapter 11 bankruptcy protection in February.
