Factory 2-U selling its stores: Factory 2-U Stores, Inc., the San Diego-based retailer of discounted apparel that filed for bankruptcy protection in February, arranged the sale of its 172 stores to a retailing group that includes National Stores Inc., a Gardena-based firm that operates Fallas Paredes stores

San Diego Business Journal, August 23, 2004 by Mike Allen

Factory 2-U Selling Its Stores: Factory 2-U Stores, Inc., the San Diego-based retailer of discounted apparel that filed for bankruptcy protection in February, arranged the sale of its 172 stores to a retailing group that includes National Stores Inc., a Gardena-based firm that operates Fallas Paredes stores.

Factory 2-U, with nine stores in San Diego, said it should get about $28 million in a deal that includes an Otay Mesa distribution center. The sale requires approval from the federal Bankruptcy Court in Delaware and could be superseded by a higher bid for the stores in an auction scheduled for Aug. 31 in the court's chambers.

Fallas Paredes has 72 stores in California, Arizona, Texas, Nevada and New Mexico.

While the sale was touted as the best option for the company, Factory 2-U said it did not anticipate any distributions to existing shareholders. The sale put in motion the company's plans not to continue as a publicly traded firm.