The main creditors of LCR Jeans, which owns the licence for LeeCooper stores and filed for insolvency in December 2009, arefreight suppliers, the bank and leasing companies, according to thecompany's management. However, mall owners say the company alsoowes them hundreds of thousands of euros.
"Freight suppliers, the bank and leasing firms financed thecompany's development in previous years, by granting investmentcontracts on medium periods of time and this is why they are nowthe main creditors," Ronen Haliva, LCR Jeans shareholder, told ZF,without disclosing the value of accumulated debt as "the list ofcreditors has not been finalised".
The retailer reported total debts of 5.3m euros and inventoriesof 2.2m euros in late 2008 to the Finance Ministry.
The company's insolvency also hurts the shopping centres theretailer has withdrawn its stores from, leaving behind debts ofseveral hundred thousand euros to malls, according todevelopers.
Lee Cooper shareholders say, though, that debts to malls amountto only several thousand euros.
"LCR Jeans debts to Vitantis shopping centre, including the rentfor several months, marketing and utilities expenses, stand ataround 40,000 euros. The company hasn't paid its rent since thesummer of 2009. In late 2009 they tried to renegotiate rents, weproposed a turnover-type rent that could have meant a cut of around70% from the basis rent for LCR Jeans, but they didn't signanything, they preferred to close the shop," stated Vlad Dragoescu,investment manager with the firm that manages the properties ofEquest investment fund that owns Vitantis.
Several shopping centre developers are in a similarsituation.
The main factor that prompted the decision to file forinsolvency was, though, the very high losses half of Lee Cooperstores had been registering for more than a year, according toHaliva. " (...) Filing for insolvency was the only legal way andthe only way we could secure protection against creditors, whichdid not like the idea of Lee Cooper closing the store in theircentre, but were not willing to understand the period we were goingthrough, either (...)," Haliva explains.
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