County Seat Stores Inc., which is in Chapter 11 bankruptcy protection, is expected to close its Rosedale distribution center next month and has begun laying off its 160 workers, according to a former consultant for the company.
The New York-based youth apparel chain relocated its national distribution center to Baltimore County from Minnesota in June to be closer to most of its 400 stores -- including 25 in Maryland.
But the retailer has been beset with "severe liquidity problems," according to Executive Vice President Brett Forman, that landed it in Chapter 11 in January, two years after emerging from bankruptcy protection while under other management.
Forman would not comment yesterday on layoffs or the distribution center.
The company attributed the liquidity problems to disruptions in the flow of merchandise caused by relocation of the distribution center and the installation of a new management information system, Forman said in a written statement in January after the company filed for Chapter 11.
"There were a combination of many factors that did not make County Seat a viable business," said Mark Millman, president of Millman Search Group, a retail consultant and placement firm in Lutherville. County Seat is a former client, he said.
Filing for Chapter 11 is "the last nail in the coffin," Millman said. "At one point, County
Seat was a well-known American retailer, but now it's going the way of Merry-Go-Round."
The company laid off most of its warehouse workers Friday and is expected to close the distribution center next month, Millman said.
In 1996, after years of declining sales, County Seat filed for Chapter 11 protection and planned to shut about 200 of its then 740 stores. The retailer emerged from Chapter 11 in October 1997, and Sam Forman and his son Brett and daughter Wendy took over the company. The Formans previously had successfully turned around American Eagle Outfitters, a retailer based in Pittsburgh, Millman said.
"They thought they could turn County Seat around, but it was more than they could possibly handle," he said.
In addition to the company's other problems, County Seat could not compete against other national retailers like the Gap, Structure and Abercrombie & Fitch, Millman said.
Pub Date: 3/11/99
