Lamonts Seeking Chapter 11 Protection

Lamonts Apparel Inc. filed for Chapter 11 bankruptcy on Tuesday, its second bankruptcy filing in five years.

Shoppers at the Northwest department store chain’s 38 locations will still be able to shop, return merchandise and redeem gift certificates, though, said Rivian Bell, a Lamonts spokeswoman.

“The store today is going to look the same as yesterday, and it will look the same tomorrow,” said Hanan Bell about the company’s financial restructuring. “What you will see over the next couple of weeks and months is more merchandise coming into the store and more variety.”

Lamonts operates two stores in Spokane - at the Manito and Shadle shopping centers - and one in Coeur d’Alene.

In 1995, when Lamonts undertook a different Chapter 11 reorganization, the chain closed 15 stores, including its downtown Spokane location. The remaining local stores, however, will remain open, said Bell, who added that there are no plans to close any stores.

During the past five years, Lamonts has eliminated $90 million in debt, but it continues to lose money.

For the fiscal year ending in January 1999, Lamonts lost $4.5 million. A similar net loss is expected to be announced at the end of this month.

“We got caught in some cash problems this year,” said Bell, “and it was a matter of one too many things hitting us at once.”

Y2K-related computer improvements, she explained, cost more than anticipated, as did installing new cash registers. A cool spring and summer also forced Lamonts to drastically mark down merchandise, causing a cash crunch. That lack of revenue over the summer months made it impossible for Lamonts to purchase enough popular merchandise to meet demand during the holiday shopping season.

Under a new debtor-in-possession agreement, Fleet Retail Finance Inc. and Back Bay Capital Funding LLC will provide $45 million financing.

Fans of Granny’s Buffet may not have noticed a change in the restaurant’s smorgasbord offerings, but the local all-you-can-eat chain has changed hands.

Buffets Inc., which operates Old Country Buffet and HomeTown Buffet restaurants across the country, purchased Granny’s Buffet’s six restaurants in Washington, Idaho and Montana last month from founder Paul Klinke and his sons Greg and Brent.

Tom Mitchell, general counsel for Buffets Inc., said the purchase was made to expand the company’s presence in the Northwest. He praised Granny’s Buffet for its excellent reputation among Spokane customers. “We’re operating the restaurants the same,” he said of Granny’s Buffet. “As a matter of fact, we felt so strongly about the strength of operations at the time of the purchase that we asked the Klinke family to stay on board with the change of ownership.”

Eventually, said Mitchell, Buffets Inc. will blend its own ideas with Granny’s Buffet’s recipe for success.

Sears, Roebuck & Co.’s fourth-quarter and year-end earnings are expected to top forecasts as the nation’s second-larger retailer sold more goods at full price and saw improvements in its credit-card business.

It was the first positive sign to come from the retailer as it embarks on a major overhaul of its business to lift sagging sales and profits.

Sears and other mid-priced department store chains such as J.C. Penney have lost shoppers to higher priced competitors such as Macy’s and Bloomingdales and discount and specialty shops such as Wal-Mart and the Gap.

Staff writer Amy Cannata contributed to this report.