House2Home misses coupon on 5¼% convertible notes

New York, Nov. 5 - House2Home, Inc. said it did not make the interest payment due Nov. 1 on its 5¼% convertible subordinated notes. The Irvine, Calif. decorating store operator added that it has a 30-day grace period to make the payment before a default occurs under the indenture.

House2Home reported the failure to make the payment in a news release late Friday. The company also said that its sales have continued to decline from the time of its last public announcement on Oct. 23. Then, the company said its sales fell 25% to 30% after the Sept. 11 terrorist attacks.

House2Home added that the continuing sales decline is "putting increased pressure" on its cash position.

"As a result of this weakening trend, our cash position has become a serious concern,'" said Herbert Zarkin, chairman and chief executive officer, in the news release. "The board of directors continues to assess the narrowing options available to us concerning the future of our company.'"

The company is currently in discussions with its bank group, led by Fleet Retail Finance, to address liquidity issues and "various financial scenarios."

It also continues to explore strategic and financial alternatives with investment bankers Barrington Associates.

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