Closeout Sale

In July, discount retailer Steve & Barry's LLC, which has a store in Chambersburg, filed for bankruptcy protection. Last month, the company announced that the U.S. Bankruptcy Court approved a "stalking horse" asset purchase agreement with the investment firm, New York City-based Bay Harbour Management.

Under the terms of the agreement, Bay Harbour acquires certain of the company's assets for $163 million. Subject to an acceptable negotiation of lease terms prior to the final auction date, the investment firm's intent is to continue to operate the chain of Steve & Barry's retail stores as a going concern, with current staff and key facilities.

The plan is to keep from 125 to 200 of the 276 stores open, depending on lease concessions wins from current landlords, according to the Wall Street Journal.

"There's a fundamentally strong business model at Steve & Barry's that just needs some finetuning to get it back on the growth track in order to reach its full potential," said Douglas Teitelbaum, managing principal for Bay Harbour.

In Chambersburg, the Steve & Barry's store is an anchor, along with an Ollie's Bargain Outlet, at the Franklin Center at 1320 Lincoln Way East that once was home to a Lowe's store.

Charter Realty & Development Corporation in Westport, Conn., owns the center. According to its Web site, Charter has a niche as a value-added retail development company that works through complex ground-up development and redevelopment scenarios.

Minimizing MAAX

In a down market, housing and leverage don't often mix, not only when borrowers are unable to pay their mortgages, but also for manufacturers of products sold to the housing sector.

Another victim of the housing slowdown hopes its new owners will stabilize the company's precarious financial situation. MAAX, Inc., the Toronto-based maker of tubs and showers, once had 400 workers in Martinsburg making acrylic tubs and showers.

"The Martinsburg plant currently employs approximately 220 employees," said Stephanie Jarrod, communications director for MAAX at its headquarters, "It is the largest facility that we operate in the United States.

Financially weakened by a leveraged buyout in 2004, near the top of the housing market, MAXX had been losing money as sales dropped by more than 10% in its last fiscal year. At the end of February, it had $541 of debt and sales of $375 million.

On August 6, the company announced that the courts in both Canada and the United States approved a sale transaction to Brookfield Bridge Lending Fund Inc., a unit of Brookfield Asset Management in Toronto. Brookfield will purchase substantially all of the assets and property of MAAX Corporation, continue to employ substantially all of the company's employees and will continue to fulfill the company's obligations to its customers and suppliers.

Jarrod said the new owners will "pay down most of the debt."

In a prepared statement, Paul Golden, MAAX president and CEO, said, "This is a significant milestone in our progress toward a successful recapitalization and a positive future for MAAX and its stakeholders. A completed sale transaction will provide us with dedicated new ownership, a strong balance sheet and greater financial flexibility. This will enable us to focus on executing our business strategy, building on our reputation for innovation, and increasing our position of leadership in the marketplace.