Christmas Tree Shops store-closing sales missed target by $14M

ATTORNEY

An attorney representing Christmas Tree Shops said the Massachusetts-based retailer’s going-out-of-business sales fell $14 million short of its revenue goal during a federal bankruptcy court hearing on Wednesday.During the same hearing in Wilmington, Delaware, an attorney for bankruptcy lender and store liquidator Hilco Global argued that Christmas Tree Shops management exceeded its loan budget and told employees they would receive bonuses that Hilco never agreed to fund.Judge Thomas Horan convinced the two sides to reach a partial deal on employee wages in which Hilco affiliate ReStore Capital agreed to pay $1.17 million to store-level employees who worked during the company’s store-closing sales.Hilco’s attorney initially argued the lender should not pay more than it budgeted in the bankruptcy loan, saying the company did not trust Christmas Tree Shops’ calculation of employee wages. Horan, however, threatened to withhold fees from bankruptcy lawyers and professionals if any low-level CTS employees did not get paid.Horan ended up converting Christmas Tree Shops’ bankruptcy from a Chapter 11 to Chapter 7 liquidation, and said a court-appointed trustee should be in charge of winding down the business. The trustee will ultimately address the issue of wages for employees who worked at CTS headquarters in Middleborough, as well as the wage claims filed by the 250 workers who were laid off when the company went bankrupt.Christmas Tree Shops filed for Chapter 11 bankruptcy in May with hopes of keeping most of its stores open. But in early July, documents filed with the U.S. Bankruptcy Court for the District of Delaware showed the company planned to close and liquidate all of its stores unless a buyer quickly emerged.The Wall Street Journal reported that the business took out a $45 million bankruptcy loan, but creditors terminated the loan after they defaulted on the terms because liquidity and revenues worsened.During the month of July, seven of the 15 Christmas Tree Shops stores in Massachusetts closed for good amid the company’s going-out-of-business sale. The CTS locations in Falmouth, Natick, North Dartmouth, Orleans, Pembroke, Sagamore and West Dennis were still operating back on the Fourth of July but were no longer listed as active locations as of July 31.Across all of New England, 11 of 29 Christmas Tree Shops locations in the region closed between July 4 and July 31.The company’s final day of business at all of its locations was Aug. 12. All eight stores that remained in Massachusetts — Avon, Foxborough, Holyoke, Hyannis, Lynnfield, North Attleborough, Shrewsbury and Somerville — officially closed for good at 9 p.m. on Saturday.The site of the Christmas Tree Shops store in Sagamore, one of the bankrupt chain’s most high-profile locations, is set to become a Spirit Halloween. The former CTS store near the base of the Sagamore Bridge, which crosses the Cape Cod Canal, was an iconic location that featured a windmill and thatched roof.The company’s early roots go back to the 1950s as a summertime Christmas gift shop on Cape Cod known as “The Christmas Tree Gift Shop,” according to Good Housekeeping. Unlike most holiday stores, Mark and Alice Matthews operated their Yarmouth Port shop from May through October — when vacationers flock to the Cape.Christmas Tree Shops had its true beginning in 1970 when Chuck and Doreen Bilezikian bought the business and moved their family into the apartment above it. The Bilezikians decided to eventually expand the store beyond Christmas ornaments and gifts and began stocking summer vacation items like beach towels and sunscreen.The official name of the retail chain is plural because the original location was made up of a trio of buildings: the Front Shop, the Back Shop and the Barn Shop, the latter of which primarily sold penny candy.Most Christmas Tree Shops stores in New England were housed in buildings that resembled Colonial, Victorian or even Old English barn style. Other locations had distinct features, such as the Lynnfield store’s lighthouse and the windmill at the Sagamore store.Information from Reuters was used in this report.Previous coverage:

An attorney representing Christmas Tree Shops said the Massachusetts-based retailer’s going-out-of-business sales fell $14 million short of its revenue goal during a federal bankruptcy court hearing on Wednesday.

During the same hearing in Wilmington, Delaware, an attorney for bankruptcy lender and store liquidator Hilco Global argued that Christmas Tree Shops management exceeded its loan budget and told employees they would receive bonuses that Hilco never agreed to fund.

Judge Thomas Horan convinced the two sides to reach a partial deal on employee wages in which Hilco affiliate ReStore Capital agreed to pay $1.17 million to store-level employees who worked during the company’s store-closing sales.

Hilco’s attorney initially argued the lender should not pay more than it budgeted in the bankruptcy loan, saying the company did not trust Christmas Tree Shops’ calculation of employee wages. Horan, however, threatened to withhold fees from bankruptcy lawyers and professionals if any low-level CTS employees did not get paid.

Horan ended up converting Christmas Tree Shops’ bankruptcy from a Chapter 11 to Chapter 7 liquidation, and said a court-appointed trustee should be in charge of winding down the business. The trustee will ultimately address the issue of wages for employees who worked at CTS headquarters in Middleborough, as well as the wage claims filed by the 250 workers who were laid off when the company went bankrupt.

Christmas Tree Shops filed for Chapter 11 bankruptcy in May with hopes of keeping most of its stores open. But in early July, documents filed with the U.S. Bankruptcy Court for the District of Delaware showed the company planned to close and liquidate all of its stores unless a buyer quickly emerged.

The Wall Street Journal reported that the business took out a $45 million bankruptcy loan, but creditors terminated the loan after they defaulted on the terms because liquidity and revenues worsened.

During the month of July, seven of the 15 Christmas Tree Shops stores in Massachusetts closed for good amid the company’s going-out-of-business sale. The CTS locations in Falmouth, Natick, North Dartmouth, Orleans, Pembroke, Sagamore and West Dennis were still operating back on the Fourth of July but were no longer listed as active locations as of July 31.

Across all of New England, 11 of 29 Christmas Tree Shops locations in the region closed between July 4 and July 31.

The company’s final day of business at all of its locations was Aug. 12. All eight stores that remained in Massachusetts — Avon, Foxborough, Holyoke, Hyannis, Lynnfield, North Attleborough, Shrewsbury and Somerville — officially closed for good at 9 p.m. on Saturday.

The site of the Christmas Tree Shops store in Sagamore, one of the bankrupt chain’s most high-profile locations, is set to become a Spirit Halloween. The former CTS store near the base of the Sagamore Bridge, which crosses the Cape Cod Canal, was an iconic location that featured a windmill and thatched roof.

The company’s early roots go back to the 1950s as a summertime Christmas gift shop on Cape Cod known as “The Christmas Tree Gift Shop,” according to Good Housekeeping. Unlike most holiday stores, Mark and Alice Matthews operated their Yarmouth Port shop from May through October — when vacationers flock to the Cape.

Christmas Tree Shops had its true beginning in 1970 when Chuck and Doreen Bilezikian bought the business and moved their family into the apartment above it. The Bilezikians decided to eventually expand the store beyond Christmas ornaments and gifts and began stocking summer vacation items like beach towels and sunscreen.

The official name of the retail chain is plural because the original location was made up of a trio of buildings: the Front Shop, the Back Shop and the Barn Shop, the latter of which primarily sold penny candy.

Most Christmas Tree Shops stores in New England were housed in buildings that resembled Colonial, Victorian or even Old English barn style. Other locations had distinct features, such as the Lynnfield store’s lighthouse and the windmill at the Sagamore store.

Information from Reuters was used in this report.

Previous coverage:

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