Storied San Francisco retailer filed chapter 11 earlier this month after failing to sell business or attract new investors
Gump’s, a storied luxury department store in San Francisco, has begun a going-out-of-business sale after 157 years in business.
A judge on Friday, August 10, granted Gump’s permission to liquidate inventory at its flagship store, located near San Francisco’s Union Square. The going-out-of-business sale is being advertised on Gump’s website. In a message to customers, the retailer said that “though this decision has been difficult, we are pleased to offer our entire selection one last time.”
Founded in 1861, Gump’s filed for chapter 11 protection earlier this month, saying the shop’s sales had rapidly deteriorated since the start of the year. Attempts by Gump’s owners to sell the business or solicit new investors failed, precipitating the bankruptcy filing.
A lawyer representing Gump’s Holdings LLC said Monday that store owners are still attempting to find buyers in bankruptcy who will continue to operate the store or the retailer’s direct ordering business. Gump’s generated more than USD 59.7 million in net revenue for 2017, court papers say.
The retailer’s senior lender, Sterling National Bank, in January declared an event of default on a loan because Gump’s had failed to maintain its minimum net worth or free cash flow requirements, court papers say. Gump’s owes more than USD 5.7 million in principal and interest on the Sterling loan. It also owes more than USD 9.3 million on a junior note.
Gump’s said the drop in sales followed years of decline because of tough conditions for retail outlets generally. Over the past several years, shoppers have migrated to the web or larger chains to purchase home furnishings. The store said purchases on its website and catalogue accounted for more than 75 % of its sales.
Despite referencing challenges in the retail market, Gump’s said in a court filing that “it does not have any real direct competitors” because it specializes in one-of-a-kind items.
The shop was founded by the Gump family and expanded in the late 1800s to provide high-end furnishings for customers who got rich during the California gold rush. The shop was rebuilt following the 1906 San Francisco earthquake, court papers say.