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Leases help Hilo Hattie move forward


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POSTED: Thursday, August 20, 2009

The new owner of Hilo Hattie will assume the leases for six retail stores, clearing a hurdle toward emerging from bankruptcy.

U.S. Bankruptcy Judge Robert Faris approved yesterday a motion — given that there were no objections — for Pomare dba Hilo Hattie to take over the leases from three landlords.

Beside its headquarters on North Nimitz Highway, Hilo Hattie, a 46-year-old company best known for its aloha wear and souvenirs, has stores at Ala Moana Center; in Hilo and Kona on the Big Island; Lihue, Kauai; and Lahaina and Kihei on Maui.

The judge's decision “;speaks to the viability of our plan,”; said Hilo Hattie Chief Operating Officer Mark Storfer. “;Our plan makes assumptions that each store is going to make a certain amount of revenue and profit.”; Every lease that's assumed will contribute to the plan, he said.

The six stores — all of which have Maui Divers Jewelry concessions — total more than 80,000 square feet of retail space.

Before filing for bankruptcy last October, Hilo Hattie had two stores in Southern California, which were closed. It now has seven stores total, including its Nimitz headquarters.

Storfer said Hilo Hattie was able to negotiate modified terms on its new leases with landlords and that it has made arrangements to take care of unpaid pre-bankruptcy rents.

               

     

 

HILO HATTIE STORE LEASES RENEWED

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
LocationLandlordLease term
Ala Moana CenterGeneral Growth2010
Prince Kuhio Plaza, HiloGeneral Growth2017
LihueWeinberg Foundation2012
Lahaina Center, MauiWeinberg Foundation*2025
Piilani Shopping Center (Kihei)RPC Piilani LLC*2040
KonaKona Coast Investment*2013

       

        * Not including options to extend

       

Source: Pomare Ltd. court filing

       

“;All three landlords have been cooperative and understanding of the Hilo Hattie objective and plight in this economy,”; he said.

In June, Donald B.S. Kang became the chief executive of Hilo Hattie after acquiring stock from former owner Ted Nelson of TOC Inc. Kang assumed the lease for the Nimitz store, and is expected to add capital into the company.

Hilo Hattie's reorganization plan is scheduled for confirmation in court on Sept. 14.

General Growth Properties is the landlord for the Ala Moana and Hilo stores, while the Harry & Jeanette Weinberg Foundation owns the Nimitz headquarters and the Lihue and Lahaina stores. Former Hilo Hattie Chairman James Romig is subleasing the Kihei and Kona stores to Hilo Hattie under RPC Piilani LLC and Kona Coast Investment Co.

While the lease for the Ala Moana store is only for another year, others are good for another 25 or so years.