Stores to Continue Operating as Usual; Commitment for
Under the Lowe's Proposal, Orchard Will Retain Its Brand, Continue to Operate Its Stores and Continue Its Repositioning and Growth Strategy as a Standalone Business
The agreement with Lowe's comprises the initial stalking horse bid in
the Court-supervised auction process under Section 363 of the Bankruptcy
Code. Under the terms of the agreement, Lowe's would acquire no less
than 60 of Orchard's stores, based on further due diligence on the store
locations. The Company expects to complete the process in approximately
90 days, pending receipt of the necessary approvals from regulators and
the
Orchard fully expects to operate its overall business and the vast
majority of its stores as usual during its financial restructuring. To
this end, the Company has secured commitments for
Orchard expects to pay suppliers in the normal course for all goods and
services delivered on or after
Orchard, which generated revenue of
"Orchard has consistently delivered an exceptional shopping experience
for our customers and, as we have executed our repositioning strategy,
has also made significant operational improvements to ensure that our
stores are optimally positioned for long-term success," said
Orchard previously has dedicated considerable effort to addressing the substantial overleveraging that originated in 2006, when it was still owned by Sears. Since the spin-out in late-2011, the Company has reduced its debt and has made significant progress against its strategic initiatives to project a consistent and compelling brand identity, drive sales through merchandising and marketing initiatives, improve operational efficiency, and better align resources and talent, and has increased year-over-year same-store sales as a result. Still, the Company anticipated it would not be able to make scheduled payments when the first tranche of its debt matures in December of 2013 and accordingly reviewed a range of alternatives to establish a sustainable capital structure, which would allow it to more effectively run its business and execute on its repositioning and growth strategy. Management and the Board of Directors determined that a sale of Orchard through a Chapter 11 process was the best possible outcome for the Company and its stakeholders.
"Orchard's neighborhood stores are a natural complement to Lowe's
strengths in big-box retail, offering smaller-format hardware and garden
stores catering to the needs of local customers," said Mr.
"Overall, Orchard's business model offers great potential, but it has
been burdened with a high level of debt,"
Orchard's customers and suppliers can access additional information about the Company's Chapter 11 filing on its dedicated website, www.OrchardRestructuring.com. Orchard also has established a supplier support center, which may be reached at 855-529-6819 or [email protected].
Orchard is advised in this transaction by
About Orchard
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995:
This press release (including information incorporated or deemed
incorporated by reference herein) contains "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of
1995. Forward-looking statements are those involving future events and
future results that are based on current expectations, estimates,
forecasts, and projections as well as the current beliefs and
assumptions of the Company's management. Words such as "guidance",
"outlook", "believes", "expects", "appears", "may", "will", "should",
"intend", "target", "projects", "estimates", "plans", "forecast", "is
likely to", "anticipates", or the negative thereof or comparable
terminology, are intended to identify such forward looking statements.
Any statement that is not a historical fact and other estimates,
projections, future trends and the outcome of events that have not yet
occurred referenced in this press release, is a forward-looking
statement. Forward-looking statements are only predictions and are
subject to risks, uncertainties and assumptions that are difficult to
predict. Therefore actual results may differ materially and adversely
from those expressed in any forward-looking statements. Factors that
might cause or contribute to such differences include, but are not
limited to, factors discussed under the section entitled "Risk Factors"
in the Company's reports filed with the
Source: Orchard Supply Hardware