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Crabtree & Evelyn files for Chapter 11

03:22 PM EDT on Tuesday, July 7, 2009

By Paul Grimaldi

Journal Staff Writer

This story incorrectly implied that the Crabtree & Evelyn store in Garden City Center could be directly affected by the recent Chapter 11 bankruptcy filing of the personal-care products company. The Garden City Center store is independently owned and operated under license with Crabtree & Evelyn, and as such, is not involved in the bankruptcy case.

Crabtree & Evelyn Ltd., which sells personal-care products at 126 stores, including one in the Garden City Center in Cranston, has filed for Chapter 11 bankruptcy court protection.

The retailer said it has been suffering from a drop in sales over the past year, due to the downturn in consumer spending. The company expects a 24.4-percent drop in retail sales for fiscal 2009 from 2008 and a 30-percent decline in wholesale revenue as well.

Crabtree & Evelyn’s e-commerce business has not slowed as much as its brick-and-mortar retail operations. The company expects online sales to increase 10 percent in 2009.

The pressure of repaying debt forced the company to file for bankruptcy, acting president Stephen Bestwick said in a court filing. He said management changes had resulted in several shifts in strategy, hurting its wholesale business.

The company plans to use the court’s protection to renegotiate leases with reluctant landlords in its effort to restructure and emerge from bankruptcy. The filing does not include operations outside the United States.

The Woodstock, Conn.-based company reported in a court filing that it owed $46.2 million in debt and had $31.7 million in assets as of March 31. The privately held company runs retail stores that sell bathroom products and gift-basket items at Copley Place in Boston, Watertower Place in Chicago, The Mall at Short Hills in New Jersey, Embarcadero Center in San Francisco and Century City Mall in Los Angeles, among others.

Besides the store in Cranston, the retailer also sells through specialty retailers around the state. It also has eight stores in Massachusetts, including a new store in Patriot Place, and a wholesale outlet in Wrentham Village Premium Outlets.

Crabtree & Evelyn’s also sells Vera Bradley bags and wallets as well as LaSource, India Hicks Island Living and Naturals products.

The company first sold products under the Crabtree & Evelyn name in 1972 and its first retail store was opened in 1977. The store’s name is derived from a short form of Crabapple Tree and the last name of John Evelyn, a Brit who wrote about conservation.

Parent company Crabtree & Evelyn Holdings Ltd. is a London-based holding company, which is in turn owned by investment holding company CE Holdings in the British Virgin Islands. CE Holdings is owned by KLKOI, another investment vehicle based in the Virgin Islands. KLKOI operates rubber plantations and manufactures oleochemicals, which are chemicals derived from oils and fats.

Other major retailers that have filed for bankruptcy during the current downturn include Steve & Barry’s, Eddie Bauer, Filene’s Basement, Linens ’N Things, Mervyn’s and Circuit City Stores Inc.

Bestwick said he hoped the reorganization would help Crabtree & Evelyn continue its “tradition of English-style elegance.”

The bankruptcy case is filed in the Southern District of New York.

With reports from The Associated Press.

pgrimald@projo.com

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