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The Wiz Files For Chapter 11 Protection

3/24/2003 02:00:00 AM Eastern

Beleaguered N.Y. metro area CE chain The Wiz has filed for bankruptcy protection following its sale earlier this month to a unit of Gordon Brothers Group, a leading retail liquidator.

TW Inc., operating as The Wiz, has filed motions with the United States Bankruptcy Court, District of Delaware, seeking approval of debtor-in-possession financing from Congress Financial Corp., and for authorization to conduct going-out-of-business sales at its 17 stores.

One week prior to the filing, former Wiz owner Cablevision Systems Corp. announced that it had sold the specialty chain for an undisclosed sum to GBO Electronics Acquisition, LLC. GBO assumed substantially all of The Wiz's assets in the stock sale transaction, including inventory and real estate, as well as its liabilities and obligations. A Cablevision spokesperson declined to provide further terms of the deal, although the company said in statement, "Consumers should look for information regarding liquidation sales in their local newspapers and through other media."

Within a day, chain-wide discounts of 10 percent were offered on all merchandise and stacks of inventory began building on store floors in advance of court-approved final clearance sales.

Boston-based Gordon Brothers specializes in inventory closeouts and real estate dispositions, having converted $11.7 billion of retail assets into cash, sold $3 billion of unwanted lease obligations, managed more than 3,500 stores and conducted over $53 billion of appraisals in the last three years alone. Its DJM Asset Management unit, headquartered near Cablevision in Melville, N.Y., has helped sell, sublease and dispose of stores for retailers including Sears, Heilig-Meyers, Tower Records and Zany Brainy, and assisted Cablevision during its first round of Wiz store closings last fall.

Cablevision bought the retailer, then called Nobody Beats the Wiz, from the founding Jemal family in a bankruptcy sale for a reported $80 million in 1998. After five years and close to $500 million in red ink, Cablevision closed 26 of 43 stores last fall and said in February it would sell or shut the remaining 17 by June. Gordon Brothers did not disclose its liquidation timetable nor plans for selling the storefronts, which would end The Wiz's 27-year ride and close another chapter in New York CE retailing.

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