ABC Carpet & Home to file for bankruptcy protection
ABC Carpet & Home is preparing to file for bankruptcy protection this week — and already has suitors lined up to scoop it out of financial distress, sources familiar with the matter tell The Post.
The super-luxe home furnishing company in recent months had retained high-powered restructuring lawyers from Greenberg Traurig and investment bank B. Riley Financial to explore its strategic options, as The Post first reported. It will likely hold an auction for its assets, including two massive stores in the Big Apple, where it has held sway for 125 years.
Several interested buyers already have submitted bids, including a consortium of Iranian rug merchants and private equity firm Windsong Global in partnership with brand licensing firm Hilco Brands. That group is hoping to be selected as the stalking horse bidders, a source with knowledge of the situation told The Post. Windsong and Hilco recently became the stalking horse bidders for the high-end Aquatalia footwear brand.
Another interested buyer of the iconic home goods retailer includes Burch Creative Capital — led by Chris Burch, who co-founded Tory Burch LLC and was previously married to the celebrity designer, a source familiar with the situation said. It’s not clear whether Burch submitted an offer, and he did not immediately respond for comment.
Hilco and Windsong declined to comment.
“The robust interest in the company has given ABC Carpet confidence that an auction process would be successful,” the source told The Post.
Aaron Rose, chief executive of the retailer, did not address the bankruptcy filing in a statement provided to The Post on Wednesday: “ABC Carpet & Home is in advanced discussions with a strategic investor who has provided funding for the company’s operations and is developing a long-term financial plan that will continue the company’s iconic legacy. Business is operating as usual during this process.”
Known for whimsical objects like a $325 handmade pink crystal perfume bottle or $595 charcoal velvet throw, along with its thousands-of-dollars rugs, ABC Carpet was hit especially hard by the pandemic, because its pricey merchandise doesn’t lend itself to e-commerce, retail experts said.
Its customers prefer to shop in person, touching and ogling the extravagant and exotic wares artfully displayed at its flagship 888 E. 19th St. flagship and its Brooklyn outlet store.
Store owner Paulette Cole has used a substantial amount of her personal funds to keep her family business afloat over the past year, sources told The Post. If the company is sold, it could be the first time in more than a century that a descendant of carpet peddler Sam Weinrib is not involved in the business.
During the pandemic, the company fell behind in its rent by more than $1 million, forcing an entity that holds its leases to file for bankruptcy protection in July. That entity, AMMA421, listed Cole as its principal, according to court filings.
Cole has acknowledged in press interviews — including with The Post — that the retailer’s Achilles’ heel has been its e-commerce experience, which she has been trying to beef up in recent years. She also downsized the company’s bricks-and-mortar presence, closing two stores in the city — an outlet warehouse in the Bronx and a carpet store across from the flagship, which also lost some of its floors in a deal with its landlord over the past several years.
Earlier this year, an offer from private equity firm MHR Fund Management fell through after reaching advanced stages, according to a Bloomberg report.
