NATICK, Mass. -- Wholesale Depot, an 11-unit chain of miniclubs based here, has filed for Chapter 11 bankruptcy protection.
The filing was precipitated by sluggish sales and Wholesale Depot's corresponding inability to finance day-to-day operations, observers said.
Mervyn Weich, Wholesale Depot's president and chief executive officer, told SN the company will continue operations until it appears in U.S. Bankruptcy court in Worcester, Mass., May 20. At that time, Wholesale Depot will present a proposal intended to convince creditors to accept partial payment on outstanding debts rather than force liquidation.
The proposal also will include a plan to restructure the company's management, Weich said.
"We filed to strengthen the company, and we think with some relief from our banks and vendors we will come out of this a stronger and more profitable operation," he said.
Wholesale Depot is a privately held company and does not disclose sales figures, but the bankruptcy filing came as little surprise to observers familiar with the mini club operator's recent struggles.
"Three or four months ago the cash flow situation reached the point where it was impinging the business," one observer said.