United Retail completes sale; new company named Avenue Stores

By Caroline Salls

Pittsburgh, April 16 - United Retail Group, Inc. has completed the sale of its assets to an affiliate of Versa Capital Management, LLC, according to a news release.

With the completion of the sale, new company Avenue Stores LLC has acquired substantially all of United Retail's assets, including an initial assumption of 246 leases.

The new company has hired the vast majority of the former home office staff in Rochelle Park, N.J., and substantially all distribution center employees and store employees in assumed stores, the release said.

Avenue Stores has 90 days to retain additional stores, with a final targeted total of about 300 stores.

During that time, the company can selectively close and consolidate stores in order to finalize a geographic footprint that maximizes profitability and sales growth potential.

According to the release, the new company's management team is led by chief executive officer Elizabeth "Liz" Williams and chief financial officer Jim Smith.

Avenue Stores said it has strong and stable financing, with substantial capital from Versa's $650 million fund and a $50 million credit facility led by Wells Fargo.

"Our plan calls for exploring every aspect of how we work so that the customer will make Avenue her store of choice every time," Williams said in the release.

"That means building new product categories, introducing new fashions that attract customers and setting fitting process and quality to facilitate the entire shopping experience.

"We will be working closely with our vendor partners as we develop these new programs.

Our goal is to make Avenue the leading U.S. retailer for plus-sized women," she added.

As previously reported, United Retail canceled its auction in March and named stalking horse bidder Ornatus URG Acquisition, LLC the successful bidder because it received no other qualified bids by the March 20 bid deadline.

Ornatus agreed to pay $32.65 million in cash, up to $4.7 million in accounts payable, $2.65 million in cure costs, the operational costs tied to some stores before the assumption or rejection of leases and assumed liabilities, according to documents filed with the court.

The company also credit bid all or a portion of the $9.5 million secured portion of a Redcats USA, Inc. claim.

United Retail is a Rochelle Park, N.J., specialty retailer of large-size women's fashion apparel, footwear and accessories. The company filed for bankruptcy on Feb. 1 in the U.S. Bankruptcy Court for the Southern District of New York. The Chapter 11 case number is 12-10405.

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