Hills' vendors shipping - Hills Department Stores Inc

Discount Store News, March 4, 1991

Hills' Vendors Shipping

CANTON, Mass. -- Fifteen of Hills' top 40 unsecured creditors formed a committee last month to negotiate with the chain during its Chapter 11 proceedings.

Led by Hasbro and Bankers Trust, the creditors committee is dominated by financial institutions. Only five manufacturers--Hasbro, Handelman, Sara Lee, Tonka and American Greetings--and two factors, Heller Financial and Bank of New York, were appointed to the committee, formed Feb. 15.

Currently, the committee is in the process of selecting legal advisers and investment bankers to represent all unsecured creditors during Hills' Chapter 11.

During the Feb. 15 meeting, Hills said that 1,200 vendors were shipping merchandise to the chain. More vendors are returning every day. "There is no major shipper that hasn't agreed to work with them," said a company spokeswoman.

Hills next hurdle was scheduled for Feb. 25 when company representatives were to appear again in bankruptcy court to gain access to the remaining $150 million of DIP (Debtor in Possession) financing. The first $100 million of the $250 million DIP total was awarded Feb. 6. Hills filed for bankruptcy protection Feb. 4.

Prior to that date the discounter had been making some cost-cutting and belt-tightening measures to help strengthen the chain. Chief among those changes was the decision to close 28 underperforming stores, half of them former Gold Circle locations, a move that is almost complete.

Prior to that, in November, company president Stephen A. Goldberger resigned, succeeded by John Brouillard, the chain's chief financial officer.

Recently, Hills announced that John G. Reen, vp and controller, was promoted to cfo. Reen is a 15-year Hills veteran.

Two other personnel changes were recently announced: Virginia Rago, previously vp, merchandising systems, to senior vp, logistics and information systems; and Joy Ehmann, formerly assistant vp, merchandising systems, to vp, merchandise planning and control.

In other news, an existing refurbishment program is moving forward. Hills announced that the program--to feature a few prototypes later this year--will include building exteriors and parking lots in addition to store interiors.