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California firm bids most for Tuchman stores

August 22, 2008
A California dry cleaning company whose own financial viability is in doubt has submitted the high bid in U.S. District Bankruptcy Court in Delaware to buy 23 Tuchman Cleaners stores in the Indianapolis area.

Newport Beach-based US Dry Cleaning Corp. reported a negative cash flow of $4.8 million in the nine months ended June 30 and an accumulated deficit of $25.9 million. The company had $933,000 in working capital.

"The company's business plan calls for various business acquisitions, which will require substantial additional capital. These factors, among others, raise substantial doubt about the company's ability to continue as a going concern," US Dry Cleaning said in its most recent 10-Q regulatory filing.

Court records did not indicate how much US Dry Cleaning bid for the 23 Tuchman stores, which are owned by National Dry Cleaners. Phoenix-based National filed for bankruptcy last month and has begun liquidating its 231 dry cleaning stores and laundry plants in Indiana and seven other states.

The court set an Aug. 28 deadline for objections to the bid, which could be approved as early as Sept. 2.

The fate of about 10 other Indianapolis-area Tuchman stores not included the bid documents remains unclear.

Tuchman has about 200 employees in the region. It was founded in the 1940s by Fred Tuchman and later acquired by National, which grew to become the nation's largest privately owned dry cleaning chain. National operates its stores under several names.

US Dry Cleaning reported sales of $10.4 million and a net loss of $6.6 million in the nine months ended in June. It operates in California, Hawaii and Virginia.

In March it bought for $1.9 million Virginia-based Zoots Corp., which operates 11 stores and a laundry plant, marking US Dry Cleaning's entry into the East Coast.

Dry cleaners have suffered from the cost of environmental compliance, rising energy costs and a sagging economy.
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