Crazy Shirts sold Local retailer Waikiki Trader Corp., emerged victorious yesterday in a hotly contested auction for ailing clothing company Crazy Shirts.
Purchase by Waikiki Trader Corp.
will keep retailer based in islesBy Lyn Danninger
ldanninger@starbulletin.comThe bidding in U.S. Bankruptcy court pitted mainland T-shirt company Big Dog Holdings, which dropped a purchase offer of $10 million in the wake of the Sept. 11 attacks., against Waikiki Trader and two other bidders.
Waikiki Trader will pay $6.75 million in cash for Crazy Shirts and an additional $1.5 million for the company's Halawa manufacturing and warehouse facility. The warehouse component of the deal is subject to securing favorable financing.
In several hours of back-and-forth bids yesterday, Waikiki Trader and Big Dog emerged as the front runners.
After the final bid was accepted by Judge Lloyd King, Waikiki Trader Chairman Ron Robertson said the acquisition will help to keep needed jobs in Hawaii.
"We will keep 66 jobs in Hawaii that Big Dog would have moved to California," he said.
The Crazy Shirts purchase can add more than 30 new outlets to the company's 47 stores that including specialty retailers such as Endangered Species and Sgt. Leisure.
One of Waikiki Trader's managers, Mark Hollander, will take over as president of Crazy Shirts.
"We are very pleased with the result. Crazy Shirts will live on as a Hawaii tradition," said current Crazy Shirts president and co-chairman Randy Yeager.
The company, founded in Waikiki in 1964, had been struggling financially for some years. The retailer closed two shops in Waikiki last week, is in the process of closing one of its Guam stores and trimmed between 10 and 30 production employees because of fallen orders.
As part of the original deal with Big Dog, the company filed for Chapter 11 reorganization bankruptcy Sept. 10, saying it had debts of roughly $24 million and assets of about $10 million. But after last month's terrorist attacks, Big Dog lost its financing though it still wanted to make a bid for the company.
Crazy Shirts' two main secured creditors, Bank of Hawaii and Congress Financial Corp., were consulted throughout the auction by the bidders.
In the end, much of the deal came down to negotiating details such as whether the bidders would assume such things as the right to select or leave behind store leases, Crazy Shirts' extensive antique collection and an equipment leasing arrangement with Bank of Hawaii worth $369,000.
At lease nine Crazy Shirts stores in Guam, New York and New Orleans as well as a factory and equipment in Tustin, Calif., will not be included in the deal, which is scheduled to close in about two weeks. Waikiki Trader will spend that time deciding which other stores to include as part of the deal.
In the meantime, creditors will have the opportunity to object to the terms of the deal in a court hearing Nov. 1.