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Manhattan’s “ABC Carpet” Succumbs to Chapter 11 Bankruptcy Due to Covid

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Edited by: TJVNews.com

Everyone is fearful, anxious and scratching their proverbial heads. It was recently reported by the NY Post that the iconic ABC Carpet & Home store in Manhattan is the latest major retail outlet to succumb to Chapter 11 bankruptcy protection due to economic calamities caused by the Covid pandemic. According to the court filing, the proceeding occurred on Wednesday in a Manhattan federal court.

The court filing indicated that the predicament that ABC Carpet found itself in as it struggled to stay afloat financially was due to the fact that they are located in Manhattan. The filing said that New York City “was the subject of not only more restrictive regulations than many other municipalities, but also experienced a mass exodus of current and prospective customers leaving the city.”

ABC Carpet drew the lion’s share of its income from in-store shoppers rather than online sales. According to the NY Post report, its upscale and sometimes bulky merchandise such as furniture does not easily lend itself to e-commerce success. Moreover, functionality has been a problem for the store’s management as was reported by the Post and several attempts were made to improve it for the user friendly crowd.

The filing revealed that ABC’s flagship store at Broadway and East 19th Street as well as an outlet store in Brooklyn were faced with overhead costs of close to $500,000 per week, as was reported by the NY Post.

Sales were down 50 percent from their 2018 level to just $25 million in 2021, the filing revealed, according to a New York Post report.

Speaking to the Post was distressed debt expert Adam Stein-Sapir. He said: “They are just not ringing the registers enough in store for the business to be viable. Most retail businesses cannot withstand a 50 percent drop in business and ABC is no exception.”

In a statement sent to the media, ABC Carpet owner Paulette Cole, the great granddaughter of the company’s founder, said: “On behalf of my father and his, I have cherished this evolving community we call ABC. I am profoundly grateful for those who walked beside me on this extraordinary journey as co-creators of the original imprint that was ABC.” The filing indicated that Cole lent the business $2.7 million of her own fortune to keep the business operating.

The Post reported that the company said its operations will continue “as usual” and that it will “honor customer programs, including deposits, merchandise credits and gift cards.”

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