The Tattered Cover bookstore chain is considering what to do with its last four stores after going bankrupt last October. Now, the CEO has shared new information about their situation.
New Plan for Financial Recovery
CEO Brad Dempsey has announced that Tattered Cover has submitted a new plan to avoid financial trouble. According to Denverite, this plan needs the green light from the U.S. Bankruptcy Court for the District of Colorado.
The bookstore chain, located in Colorado, operates two stores in Denver and one each in Littleton and Aurora. Dempsey mentioned that the company is looking into ways to reduce costs.
According to Tattered Cover's website, these strategies may involve moving the stores to locations where the rent is lower.
Dempsey also stated that these changes aim to transform Tattered Cover into a smaller, up-to-date business that can support itself financially over the long term.
He announced a major plan to help the bookstore recover financially. According to Dempsey, the board of directors, senior management, potential lenders, and investors agree that using Subchapter V of Chapter 11 for reorganization is the fastest way to get Tattered Cover back.
This move aims to preserve Tattered Cover's longstanding position as a beloved destination in Colorado and a supporter of the First Amendment for future generations.
Dempsey further explained the goal is to transform Tattered Cover into a smaller, updated, and financially stable entity. This transformation will ensure the bookstore's service to Colorado's readers for many years.
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Tackling Challenges for a Brighter Future
However, Dempsey acknowledged that achieving long-term sustainability would involve making tough decisions that might affect employees and business partners. Despite these challenges, the CEO expressed gratitude for the staff's professionalism and commitment to guiding Tattered Cover through this period of change.
Additionally, Dempsey reassured customers that all gift cards would still be accepted and that the bookstore would continue fulfilling orders without disruptions.
Dempsey has stated that Tattered Cover has several difficult steps to take, including complex talks, handling local economic challenges, and making tough choices to become profitable again.
"Even though we have hard work ahead and must deal with tricky negotiations and the local economy's pressures, we're hopeful about our future," Dempsey said. He believes that Tattered Cover can look forward to a bright future with the dedication of its fantastic team and support from Colorado residents and people nationwide.
Tattered Cover Eyes June 2024 for Recovery
Dempsey believes that Tattered Cover could get out of bankruptcy by June 2024. The plan is to make $3.4 million to pay off debts not secured by collateral and to mend its relationship with business partners.
A key reason for Dempsey's hopefulness is the bookstore's excellent sales during the holiday season, which brought in significant money.
However, the bookstore faces rising costs, including higher wages, rent, and health insurance.
The plan to eliminate debt, which still needs approval, aims to have the company debt-free by 2025. Denverite reports that the U.S. Bankruptcy Court for the District of Colorado will review the plan in May.
This situation is not unique to Tattered Cover. Other stores are also rethinking their physical locations. For instance, the U.S. Sun noted that a Mooks-A-Million store in Lafayette, Louisiana, began a closing sale last December, confirmed by Google Maps to have since shut down.
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