Plej's On Comeback Trail
May 9, 2005,
Rock Hill, S.C. — With its recent emergence from Chapter 11, Plej's Linen Supermarket is moving ahead with new business strategies to win back target customers and eventually expand into former markets where it recently closed doors.
“We're focusing on the basics in sheets, towels, rugs, curtains, basically domestics — and less on opportunistic buys and home décor items,” he explained. “It's a learning curve and we're a work in progress. But we see that as the best way for us. The home décor items are harder to compete in against some of the other players out there.”
The company is also performing some in-house market research, “talking to our customers, asking them what they want to see in our stores,” he explained, adding that not all Plej's stores will necessarily carry the same merchandise. “None will look identical in terms of content,” he said. “We are tailoring each store based on its customer demographic.”
Plej's target customer is the 25- to 35-year-old female with $35,000 in annual income. “We're a couple of notches above a dollar or discount store,” Jackson said.
And the company is also continuing with its resets project it started about six months ago to re-fixture and improve signage and displays at its units. Already eight of the stores have been reset, Jackson, said. “We are looking at each of our stores and making improvements as needed,” he said.
In conjunction with its emergence from Chapter 11, Plej's has also closed on its new $7.5 million exit financing facility provided by Wells Fargo Retail Finance. This credit facility, which is secured primarily by inventory, replaces the company's $10 million debtor-in-possession facility and is available to Plej's to help meet its ongoing working capital needs, including borrowings for seasonal purchases of inventory.
“This is a momentous day for Plej's,” said Joel Ostrow, chairman of the board. “Although the last 12 months have been difficult and required sacrifice by all involved, the company successfully used the Chapter 11 reorganization process for the purposes for which it was designed. Plej's emerges from Chapter 11 having accomplished all our major objectives for this process. We have strengthened our balance sheet and significantly reduced liabilities. The exit financing that complements our revitalized capital structure will provide continued assurance to our vendors and landlords about our stronger liquidity position. We have closed underperforming stores and renegotiated several lease agreements.”
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