Tom Shane, the
president and CEO of Shane Co., very generously spoke to me yesterday,
following the news that his company has emerged from bankruptcy:
What were the major
issues in the bankruptcy proceedings?
What we offered in court 21 months ago is basically what we
delivered on. It took a significant period of time and a couple of million
dollars in professional fees to get back to what I offered at the onset.
The spirit of the vendor community has been fantastic. A
huge percentage of our vendors gave an affirmative vote to the bankruptcy plan.
It was a landslide.
We didn’t really have sticking points or hard issues. We are
offering to pay as quickly as we can and to pay 100 percent of the amount owned. It is
not feasible to do more.
The way that the plan is structured, we will not be burdened
with commitments that we will not be able to live up to. We will be able to
operate as we normally would. That is best for us and for our vendors. We remain
a strong player in the industry and we continue to pay cash for our inventory.
As we generate surplus cash, we will turn it over to the creditors to repay the
old debts.
What are Shane’s
plans going forward?
The issue of the bankruptcy has no impact on what we will be
doing in the near future. We are unimpacted, except that any surplus cash goes
to pay back the old debt. We are operating the same as if the bankruptcy had
not occurred. Since the day we filed, we have made no changes.
We continue to desire to build our chain and to increase the
volume of the existing stores. We are always looking for new opportunities.
This is nothing new. That is how we have been doing business for 40 years.
How is business?
Business in bridal remains strong. Fashion is slowly coming back.
I will say that, in terms of our customer base, the bankruptcy has not impacted
us. Our layaways are an interesting barometer. When a customer has enough
confidence to give you their cash and walk out the door with nothing but a
receipt, they obviously are comfortable with the stability of our company.
How have your
employees reacted?
You should see the congratulatory e-mails I have gotten both from
our employees and the vendor community. Obviously when you hear that your
company is in chapter 11 that is not good thing. But I am proud to say we did
not lose one employee out of fear that the company wasn’t going to make it.
Anything else you
want to say to the industry?
We are extremely relieved to have the burden of bankruptcy behind
us so that we can concentrate on the operational side of the business. I am extremely
gratified by the trade’s ongoing and continued support and the sooner we can get
this debt paid off, the happier we will be.
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