J. Peterman prepared to liquidate company ============================= Western wear company shopping for buyer
By Tim Whitmire, Associated Press, 02/22/99
LEXINGTON, Ky. - Put the duster-clad man in the J.
Peterman logo on a horse and point him west. The catalog
retailer is preparing to ride off into the sunset. Founder John Peterman said Monday that last-ditch
attempts to find a buyer for his struggling company had
failed. He said he expects a U.S. Bankruptcy Court judge
to
set a date Tuesday for an auction at which the company's
assets will be sold to the highest bidder, with proceeds
going to the company's creditors. "Over the weekend, we had a buyer, but their proposal
wouldn't work'' both in terms of price and structuring,
Peterman said in a telephone interview. "The court
wouldn't
have accepted it.'' Though apparently resigned to the prospect that his
12-year-old company will be liquidated, Peterman had not
given up. "We'll continue to try to pull it out of the
fire until
the auction,'' he said. The J. Peterman Co., which employs 500 people, most in
Lexington, sought protection from creditors in a Jan. 25
petition filed under Chapter 11 of the U.S. Bankruptcy
Code.
Chapter 11 enables a company to keep operating under a
court's supervision while it develops a plan for
returning to
solvency. In its most recent set of court filings, Peterman listed
debts
of more than $14 million. The company has remained in business in recent weeks
through a series of stopgap loans provided by its only
secured creditor, Heller Financial of Chicago, now owed
nearly $10 million. Those loans have not included money
to
buy spring merchandise, and the company is now two
weeks overdue in putting out its spring catalog, Petermansaid.
Peterman said Heller, a primary investor in last year's
plan
to open 70 J. Peterman retail stores, refused to extend
additional credit that might have allowed the company to
work its way out of problems. Late last year, when the company ran into snags in
opening
new stores and a slowdown in catalog sales, "Heller
squeezed down at a time when we needed flexibility,''
Peterman said. Peterman, a 57-year-old former minor league baseball
player and marketing consultant, first started selling
vintage,
cowboy-style dusters in 1987 through ads in the back of
The New Yorker and The Wall Street Journal. By the next year, he was putting out a catalog that was
something new in the mail-order business: consciously
upscale, with color sketches of the merchandise instead
of
photographs and lyrical copy that invested the
merchandise
with a romantic, exotic history. The marketing approach was imitated by other retailers
and
become the target of satire on the top-rated television
comedy "Seinfeld.'' During the show's final three
seasons,
ending last May, the character Elaine Benes worked for J. Peterman, whose headquarters were relocated to New York
for the show's purposes. Early last year, the real John Peterman decided to
capitalize on the fame with a retail expansion that
included
plans for 50 stores and 20 catalog outlets. Peterman recruited executives from J. Crew, Calvin Klein
and The Gap, raised $10 million from private investors
and
made plans to target upscale markets. By the end of the year, though, there were layoffs and a
freeze on new store openings, followed last month by the
bankruptcy filing. Even if the current incarnation of J. Peterman goes out
of
existence, the founder promised that "You haven't heard
the
last of J. Peterman.'' First, Peterman said, he plans to
write
a book. "There have been more experts and smart people in here
who, when you put all of that together, it just became
tragically humorous,'' he said.Peterman apparently will have competition. Robert Bolson,
a former copy writer for the J. Peterman catalog, said
Monday he is seeking an agent and publisher for his
account, "J. Peterman, Behind the Duster: Autopsy of an
American Phenomenon.'' Peterman's reaction? "Unfortunately, Robert doesn't know
a
thing about the company,'' he said.