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Crown May Close as Many as 79 Stores
Jim Milliot -- 8/3/98
The U.S. bankruptcy court in Wilmington, Del., was scheduled to rule last Friday, July 31, on a motion by Crown Books concerning the number of stores it will close as part of its restructuring effort. According to the motion, Crown is asking the court's permission to close up to 79 of its 177 outlets. Crown has also hired Hilco/Great American Group to conduct going-out-of-business sales that would be held for a maximum of 90 days.
Although Crown's proposal was subject to revision at press time, the original plan called for Hilco to operate going- out-of-business sales at 43 locations, while Crown would close another 36 stores. It is possible, however, that Hilco could close all 79 stores. Under the proposal, Crown would close all stores in four markets: Dallas (three), Philadelphia (four), Houston (10) and Seattle (12). The chain would also close 12 stores in the Chicago area, 16 in Los Angeles, 14 in metropolitan Washington, D.C., one in San Diego and seven in San Francisco.

Crown values the merchandise at the 79 stores at a minimum of $40 million. Provided all merchandise is sold, Crown would receive a minimum of $16.2 million if Hilco handled the liquidation of all 79 stores, and $15.2 million if only 43 stores are liquidated by Hilco. In addition to books, Hilco would also sell all furniture, fixtures and equipment free of liens. In the stores in which it operates, Hilco will be responsible for all operating expenses, including payroll.

In a separate motion filed last week, Crown sought approval to reach a book return agreement with Ingram, through which Crown would return books in exchange for a reduction of Ingram's claim that Crown owes the wholesaler more than $10 million. The agreement also provides that Ingram will repurchase up to 35% of the merchandise in the stores at 77.5% of Crown's cost.
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