Retailer to close, liquidate assets

Women's specialty retailer Paul Harris, based in Indianapolis, declared bankruptcy in 1991. After cutting back on production costs, it pulled out of its financial difficulties.\nIt filed for bankruptcy again in October, and this time it had no such luck.\nPaul Harris, which has a Bloomington location at the College Mall, announced Monday that it is closing its remaining 166 stores in a liquidation of all its assets.\nIt let go of 107 employees; about 1,600 will remain on the job until May 22.\nStruggling to cut expenses, the retailer eliminated 100 of its 266 stores Feb. 22, including a Bloomington outlet at Eastland Plaza and its flagship store in Indianapolis, which had been around since 1952.\n"The debtor couldn't find equity financing," said Dan Motsinger, legal counsel for LaSalle Bank, Paul Harris's largest creditor. "No one is happy with the circumstances in which Paul Harris finds itself."\nPending approval from the court and creditors, the company had hoped to emerge from bankruptcy in 75 days. But sales continued to sag -- the company reported an 8.7 percent December decline in sales. \nBefore declaring bankruptcy, Paul Harris reported a net loss of $12.5 million during the second financial quarter of 1999, bringing its total debt to about $60 million. The company is valued at $116.4 million in assets.\nIts stock hovered around 16 cents for most of the year, dropping to four cents a share after Monday's announcement. \nAt a Monday press conference, CEO Glenn Lyon said the company had no other choice but to fold. Given the lack of revenue, he said it had a hard time finding anyone to lend financial support.\n"We're announcing today that Paul Harris has been unable to obtain the financing or the vendor support that we needed to implement our plan for reorganization," he said.\nLyon, who has been on the job for less than a year, expressed sympathy for those losing their jobs.\n"These people -- whether on the job for an year or 26 months -- have given their lives to this place," he said. "These are 24/7 people, and it breaks my heart with the emotions going around today."\nA manager at the Bloomington outlet said the company promises a severance package, which will be announced later in the week.\nLaSalle, the bankruptcy court and Paul Harris negotiated the liquidation budget in a Monday teleconference. Motsinger, citing legal reasons, declined to give details.\nThe company plans to start its going-out-of-business sale Wednesday. \nFounded by Gerald Paul and Earl Harris, it first went public in 1960. Last year, it operated more than 300 stores in 29 states.