Bunnybear

Crabtree & Evelyn, the purveyor of specialty soaps, fragrances and lotions, became the latest retailer to fall victim to the economic downturn, filing for Chapter 11 bankruptcy protection on Wednesday in the United States.

The company, a unit of Crabtree & Evelyn Holdings in Britain, said it would continue to operate its stores and would honor gift cards and returns as it reorganizes under bankruptcy protection.

The company said it would close some stores and try to renegotiate leases for others. It currently operates 126 stores in 34 states and employs about 950 people.

In a court filing, Crabtree & Evelyn’s acting president, Stephen Bestwick, said a decline in the housing market and tightening of credit had reduced consumer discretionary spending, especially in shopping malls where many of its stores were located.

He also said management changes at the company resulted in strategy shifts, including lower sales to wholesale accounts and a “disconnect” between executive pay and performance.

The retailer expects to lose $13.3 million on revenue of about $100 million in the current fiscal year, compared with a loss of $8 million on revenue of $107.5 million in the year that ended Sept. 30, 2008.

Crabtree & Evelyn has $10 million to $50 million of both assets and debts, a court filing said. It has received a commitment for a $40 million debtor-in-possession financing facility from its owner, Kuala Lumpur Kepong Berhad, a multinational company based in Malaysia.

Crabtree & Evelyn companies outside of the United States are not affected by the Chapter 11 filing.

http://www.nytimes.com/2009/07/02/business/economy/02retail.html