Baugur US operation seeks bankruptcy protection
Discount retailer cites lagging sales
July 27 2003
Bonus Stores, the US discount retail chain owned by Icelandic retailer Baugur, has filed for bankruptcy protection.
The Bonus Stores chain, which recent press reports said was having problems paying suppliers, filed for Chapter 11 bankruptcy protection with the US Bankruptcy Court in Delaware at the end of last week.
Baugur recently indicated it was in talks with several other US retailers for the sale of the majority of the 335 stores, which trade as Bonus Dollar Stores and Bill’s Dollar Stores.
Baugur, which has operated the chain for three years after merging two acquisitions, has indicated that it hopes to exit the US to concentrate in its operations in both Scandinavia, and in the UK where it has just won control of toy retailer Hamleys.
Icelandic bank Kaupthing also has a stake in Bonus stores, while Baugur chief executive Jon Johannesson privately owns a small package of Bonus stores in Florida. The stores are located mainly in rural communities in southern US states.
Filing for protection from creditors, Bonus Stores said it had $78m in assets and $61.6m of debts. Chief financial officer Alan Williams cited lagging sales as the main reason for the difficulties.
The filing to the court also said Bonus has discovered “a deficiency in its internal controls as they relate to management and monitoring of inventory shrinkage.”
