Z Gallerie Exits Chapter 11
Z Gallerie, a privately-held retailer of home furnishings and decorative accessories, has emerged from Chapter 11 and completed its recapitalization in less than six months. The company also reached an agreement with Wells Fargo Business Credit on a $22 million exit financing package.
“We are pleased to have obtained support from our major constituencies and to have completed the process so quickly,” said Mike Zeiden, Chief Financial Officer and co-founder. “The reorganization allowed us to achieve a recapitalization of our balance sheet that results in a stronger financial foundation. Combined with the rightsizing Z Gallerie accomplished before the filing, we are in an excellent position to meet the challenges and opportunities that lie ahead of us.
“Joe, Carole, and I started Z Gallerie as a family-owned business, and we are elated to keep that ownership intact. Our family eye to the business and to our customers is one of the reasons for our past success, and we are thrilled to have retained it for the future. We are deeply grateful to all of our employees for their tremendous assistance during this period. Their unwavering loyalty has provided consistency and talent, not only in our stores, but throughout the organization. We would also like to thank our business partners who worked with us throughout our reorganization. Their ongoing support and words of encouragement served as constant reminders of the strong relationships we have established over the past 30 years. Most importantly, we want to thank our loyal customers who continued to support us. It goes without saying: it is because of them we are here today. We look forward to a great future together.”
The company’s Plan of Reorganization was approved by virtually all of the company’s vendors. “Our vendors have been extremely supportive,” stated Carole Malfatti, Vice President and co-founder. “We are fortunate to be able to work with the best to provide the most interesting assortments for our style-conscious customers.”
Zeiden noted that sales are meeting projections, and the company is looking forward to the upcoming holiday season. He stated, “While Z Gallerie has always provided unique and quality merchandise at affordable prices, we are also mindful of our customer’s budget in today’s economic environment. Customer response to our current pricing model has been positive.”
The company recently launched a Facebook fan page that attracts an enthusiastic customer following. Over 5,000 fans participate regularly, and their positive comments serve as a testament to Z Gallerie’s influence in the market and help build brand awareness.
The company has retained all of its principal merchandising and customer programs, including its private label credit card. Z Gallerie also continues to enhance its website and social networking capabilities. These efforts, along with in-store merchandising, will better assist customers with their home decorating decisions.
Z Gallerie is being advised by its turnaround managers, Thomas S. Paccioretti and Benjamin F. Cary of Broadway Advisors, LLC; and its bankruptcy counsel, Jeffrey W. Dulberg and Scotta E. McFarland of Pachulski Stang Ziehl & Jones LLP.
About Z Gallerie
Founded in 1979 by family members Joe Zeiden, Carole Malfatti and Mike Zeiden, Z Gallerie began as a small poster shop in Sherman Oaks, Calif. Today, Z Gallerie offers high-quality, well-priced merchandise for the entire home. Its assortment includes furniture, artwork, lighting, table top items, textiles and decorative accessories. The company now operates 54 retail locations in 18 states, a website and one outlet. Its headquarters and distribution center are located in Gardena, Calif., and creative and buying offices are located in Berkeley, Calif. Z Gallerie is a privately-held company, employing nearly 800 people.
The Sage Group acted as exclusive financial advisor to Z Gallerie.