Celebrity Retailer Kitson Liquidates as Vendors Weigh Options
As many of its vendors weigh the possibility of putting it into bankruptcy involuntarily, upmarket retailer Kitson is already looking to wind down stores and sell its brand through an Assignment for the Benefit of Creditors, a liquidation proceeding outlined by California law. Kitson, a Los Angeles-based boutique and hangout for celebrities such as Kim Kardashian and Paris Hilton, drew up a contract under the ABC on Dec. 12, according to the counsel to the assignee, David Golubchik of Levene, Neale, Bender, Yoo & Brill. Golubchik said there are plans to notify creditors by the end of this week. The assignee is Boston-based restructuring and liquidation advisory firm Winter Harbor, Golubchik said. Golubchik believes it is too early to tell what creditor recoveries will be, since Kitson is still working on store closing sales run by liquidators Gordon Brothers Group and Hilco Merchant Resources. The closing of Kitson's 17 stores in California, Oregon, and Nevada was announced Dec. 11. Two sources familiar with the situation, however, said they believe senior lender Salus Capital Partners, which provided a $15 million asset-backed loan to Kitson in 2013, will be repaid in full. But they said that it doesn't look like there will be enough money to make the junior lender, an affiliate of Spencer Spirit Holdings, whole on the loan it provided in June.
