Heilig-Meyers Announces Plans to Focus on RoomStores Operations Under Revised Business Model; Will Close Remaining Heilig-Meyers Stores

Apr 11, 2001, 01:00 ET from Heilig-Meyers Company, Inc.

    RICHMOND, Va., April 11 /PRNewswire/ -- Heilig-Meyers announced today that
 in order to achieve its restructuring initiatives and maximize creditor
 recoveries, it will concentrate on its RoomStore operations and close all
 remaining Heilig-Meyers furniture stores.  The Company filed a motion with the
 Bankruptcy Court today seeking the authorization to close and liquidate the
 inventory in approximately 375 remaining Heilig-Meyers stores.
     "Since the Company's voluntary Chapter 11 filing in August 2000,
 management and the Board of Directors have been exploring various
 restructuring alternatives that would result in maximum recovery to our
 creditors," said President and Chief Executive Officer Donald S. Shaffer.
 "After extensive review of our operations, in what has proved to be an
 extremely challenging retail environment, it was determined that our RoomStore
 format should be the centerpiece of our ongoing reorganization efforts."
     Mr. Shaffer said that since the filing the Company completed various
 strategic initiatives at the Heilig-Meyers stores aimed at reducing working
 capital requirements and improving cash flow, including the closing of over
 400 underperforming stores and the outsourcing of the Company's customer
 credit operations.  "Despite our significant progress, we determined that
 based on the slowing of the economy and considerable weakening of the retail
 market, a successful reorganization of the traditional Heilig-Meyers furniture
 stores could not be completed within a timeframe that would allow us to
 fulfill our fiduciary responsibility to our creditors and other stakeholders,"
 he said.
     "The RoomStore format, under which customers may purchase entire rooms of
 furniture, complete with accessories and decor items, has been successful for
 the Company," Mr. Shaffer said, noting that the 54 traditional RoomStores are
 concentrated in metropolitan markets in Texas, Maryland and Washington D.C.
 and generate annual revenues of approximately $300 million. "As we finalize
 our restructuring plans and restore the confidence of our associates and those
 vendors which supply the RoomStore, we firmly believe these stores will be
 well positioned to effectively compete in today's retail furniture industry.
 We are encouraged by the success of our RoomStore operations and the continued
 good prospects for the RoomStore format, and will work diligently to keep them
 operating at the highest level possible while we complete our restructuring,"
 said Mr. Shaffer.
     He said that 16 traditional Heilig-Meyers stores were converted to
 RoomStores since the filing, and the Company is studying the conversion of
 additional stores in selected markets.  The Company plans to maintain its
 regional offices in Dallas, Texas and Landover, Maryland to support RoomStore
 operations in those two markets.
     The Company is in the process of finalizing an arrangement with a third
 party to conduct going-out-of-business sales at the remaining Heilig-Meyers
 stores.  Current Heilig-Meyers employees are expected to staff the stores
 during the process.  The Company anticipates that the closing sales will be
 completed by mid to late summer.  The Heilig-Meyers headquarters office in
 Richmond, Virginia will continue to provide various support functions for the
 ongoing RoomStore operations following the wind-down of tasks associated with
 the liquidation of the Heilig-Meyers stores.
     In connection with the restructuring, Mr. Shaffer said the Company is also
 involved in discussions with various interested parties for the sale of its
 three Homemakers stores.
     The Company filed voluntary Chapter 11 petitions in the U.S. Bankruptcy
 Court for the Eastern District of Virginia in Richmond for Heilig-Meyers
 Company, Inc., on August 16, 2000.
 
 

SOURCE Heilig-Meyers Company, Inc.
    RICHMOND, Va., April 11 /PRNewswire/ -- Heilig-Meyers announced today that
 in order to achieve its restructuring initiatives and maximize creditor
 recoveries, it will concentrate on its RoomStore operations and close all
 remaining Heilig-Meyers furniture stores.  The Company filed a motion with the
 Bankruptcy Court today seeking the authorization to close and liquidate the
 inventory in approximately 375 remaining Heilig-Meyers stores.
     "Since the Company's voluntary Chapter 11 filing in August 2000,
 management and the Board of Directors have been exploring various
 restructuring alternatives that would result in maximum recovery to our
 creditors," said President and Chief Executive Officer Donald S. Shaffer.
 "After extensive review of our operations, in what has proved to be an
 extremely challenging retail environment, it was determined that our RoomStore
 format should be the centerpiece of our ongoing reorganization efforts."
     Mr. Shaffer said that since the filing the Company completed various
 strategic initiatives at the Heilig-Meyers stores aimed at reducing working
 capital requirements and improving cash flow, including the closing of over
 400 underperforming stores and the outsourcing of the Company's customer
 credit operations.  "Despite our significant progress, we determined that
 based on the slowing of the economy and considerable weakening of the retail
 market, a successful reorganization of the traditional Heilig-Meyers furniture
 stores could not be completed within a timeframe that would allow us to
 fulfill our fiduciary responsibility to our creditors and other stakeholders,"
 he said.
     "The RoomStore format, under which customers may purchase entire rooms of
 furniture, complete with accessories and decor items, has been successful for
 the Company," Mr. Shaffer said, noting that the 54 traditional RoomStores are
 concentrated in metropolitan markets in Texas, Maryland and Washington D.C.
 and generate annual revenues of approximately $300 million. "As we finalize
 our restructuring plans and restore the confidence of our associates and those
 vendors which supply the RoomStore, we firmly believe these stores will be
 well positioned to effectively compete in today's retail furniture industry.
 We are encouraged by the success of our RoomStore operations and the continued
 good prospects for the RoomStore format, and will work diligently to keep them
 operating at the highest level possible while we complete our restructuring,"
 said Mr. Shaffer.
     He said that 16 traditional Heilig-Meyers stores were converted to
 RoomStores since the filing, and the Company is studying the conversion of
 additional stores in selected markets.  The Company plans to maintain its
 regional offices in Dallas, Texas and Landover, Maryland to support RoomStore
 operations in those two markets.
     The Company is in the process of finalizing an arrangement with a third
 party to conduct going-out-of-business sales at the remaining Heilig-Meyers
 stores.  Current Heilig-Meyers employees are expected to staff the stores
 during the process.  The Company anticipates that the closing sales will be
 completed by mid to late summer.  The Heilig-Meyers headquarters office in
 Richmond, Virginia will continue to provide various support functions for the
 ongoing RoomStore operations following the wind-down of tasks associated with
 the liquidation of the Heilig-Meyers stores.
     In connection with the restructuring, Mr. Shaffer said the Company is also
 involved in discussions with various interested parties for the sale of its
 three Homemakers stores.
     The Company filed voluntary Chapter 11 petitions in the U.S. Bankruptcy
 Court for the Eastern District of Virginia in Richmond for Heilig-Meyers
 Company, Inc., on August 16, 2000.
 
 SOURCE  Heilig-Meyers Company, Inc.