MISSOULA, Mont. - Following up on a story we first reported yesterday, the largest independent retailer in Montana is headed for bankruptcy. Vann's, Inc. hopes to make the filing next week in an effort to restructure.
"I think the ideal situation now is a restructuring, seeking protection under the bankruptcy code -- Chapter 11 -- and kind of step back, look at some pieces of the business that are kind of hemorrhaging red ink, and we've got others that are profitable, so we just need to take our time and sort through those," said CEO Jerry McConnell.
Founded in 1961, Vann's grew from a single store in Missoula to six stores across the state.
In addition to retail outlets, the company moved into an aggressive internet position. Insiders indicate it was the internet that ultimately pulled the business down, as the country dealt with a housing bust and recession.
Chapter 11 could allow the local stores to survive. The company thought it had financing set with GE Capital, but that folded. Today they turned to local lenders.
McConnell hopes to have local financing in place by Monday. Then he'll file the Chapter 11 reorganization plan.
"We have a local lender we're working with that we think is going to do the whole package, the whole debtor-in-possession financing," said McConnell. "We believe we left the room today with that agreement, and over the weekend they'll put something together, we'll meet first thing Monday morning and hopefully we'll file Monday afternoon."
Vann's has five retail stores in Montana, as well as two internet retail sites and the ON Store in Missoula's Southgate Mall. A store in Helena was closed earlier this year.