County Seat Stores Inc – ‘8-K’ for 1/22/99 – EX-99.1

As of:  Wednesday, 1/27/99   ·   For:  1/22/99   ·   Accession #:  1047469-99-2327   ·   File #:  333-47997

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Current Report   —   Form 8-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 8-K         Current Report                                         2      9K 
 2: EX-99.1     Press Release Dated January 22, 1999                   2     13K 

EX-99.1   —   Press Release Dated January 22, 1999

EX-99.1
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                                                                    Exhibit 99.1

[LETTERHEAD OF COUNTY SEAT] 

FOR IMMEDIATE RELEASE                                                           

CONTACT:                                                                        
Brett Forman                            Sue Wasudev (financial community)       
Executive Vice President                Ellen Paz (media community)             
County Seat Stores                      Citigate Dewe Rogerson Inc.             
(212) 714-4810                          (212) 688-6840                          

COUNTY SEAT STORES FILES FOR REORGANIZATION 
WITH $75 MILLION OF DEBTOR-IN-POSSESSION FINANCING

STORES ARE OPEN FOR BUSINESS AS USUAL   

NEW YORK, JANUARY 22, 1999 - County Seat Stores, Inc. announced today that it   
and CSS Trade Names, Inc. a wholly-owned subsidiary, filed voluntary            
petitions for reorganization under Chapter 11 of the United States Bankruptcy   
Code. The filings, which were made in the United States Bankruptcy Court for    
the Southern District of New York, will enable the company to conduct           
business as usual under protection of the Court while it develops a plan to     
reduce and reorganize its debt and strengthen its financial position.           

County Seat also announced that it has obtained a $70 million                   
debtor-in-possession financing commitment, including a $50 million sub-limit    
for letters of credit, from BankBoston Retail Finance Inc. The company has      
also received an additional $5 million debtor-in-possession financing           
commitment from BackBay Capital Funding, L.L.C. Upon court approval, these      
financings will enable the company to meet future inventory needs and fulfill   
obligations associated with operating its business, including payroll and       
prompt payment for merchandise received subsequent to the filing.               

"The decision to file was a difficult one," said Brett Forman, Chief            
Operating Officer of County Seat Stores. "We believe that, notwithstanding      
the severe liquidity problems that we have encountered over the past few        
months. County Seat's business and future prospects remain fundamentally        
strong."                                                                        

He continued, "We are confident that, with the liquidity provided by the $75    
million of debtor-in-possession financing facilities and the breathing room     
that court protection under Chapter 11 will afford, County Seat will            
ultimately emerge from Chapter 11 a stronger company."                          

EX-99.1
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COUNTY SEAT STORES                                                              
PAGE 2                                                                          

The company has been unable to overcome severe liquidity problems relating,     
in large part, to an approximate 12% decline in same-stores sales for the       
1998 third-quarter. The company encountered significant disruptions in the      
flow of merchandise as a result of problems with the installation and           
integration of a new management information system (MIS) and the relocation     
of the company's distribution center from Minnesota to Baltimore.               

To insure that stores had fall and winter merchandise on a timely basis, the    
company was forced to stop shipping spring and summer merchandise earlier       
than planned, to significantly discount merchandise to make room in the         
stores for fall and winter merchandise, and to ship fall and winter             
merchandise earlier than planned. The financial results for the company's       
third quarter created defaults and limited availability under the company's     
working capital facility. While the company attempted to alleviate liquidity    
problems by raising funds through a private offering of new debt and or equity  
securities during the latter part of 1998, the required amount of new funds     
could not be obtained.                                                          

"We believe that we have identified and substantially rectified the problems    
associated with our management information system and the relocation of our     
distribution center," Forman said. "Additionally, in October 1998, we           
instituted a new merchandising strategy based on a maximum price point of       
$14.99 for most of the company's merchandise. We have already seen positive     
results from these steps. Comparable sales for the months of October through    
December 1998 increased by 7.4%."                                               

County Seat is among the nation's largest mall-based specialty retailers of     
casual apparel, operating 418 stores in 41 states in the eastern, midwestern    
and southern regions of the United States, including 375 County Seat stores,    
15 County Seat Outlet stores, 22 Levi's Outlet stores and six Old Farmer's      
Almanac General stores. The company reported in its Form 10-Q for the quarter   
ended October 31, 1998, that Levi Strauss & Co. had terminated its license      
pursuant to which the company operated its Levi Outlet stores and the company   
had entered into a non-binding letter of intent to sell the assets associated   
with those stores to a third party. While that third party has recently         
expressed the intention of not going forward at this time, negotiations are     
continuing. If a definitive agreement can be reached, the company intends to    
seek expedited Bankruptcy Court approval of that sale. If an agreement cannot   
be reached, the company intends to proceed on an expedited basis to dispose     
of its Levi's Outlet stores.                                                    

ALL FORWARD LOOKING STATEMENTS MADE BY THE COMPANY INVOLVE MATERIAL RISKS AND   
UNCERTAINTIES AND ARE SUBJECT TO CHANGE BASED ON FACTORS BEYOND THE COMPANY'S   
CONTROL. ACCORDINGLY, THE COMPANY'S FUTURE PERFORMANCE AND FINANCIAL RESULTS    
MAY DIFFER MATERIALLY FROM THOSE EXPRESSED OR IMPLIED IN ANY SUCH               
FORWARD-LOOKING STATEMENTS. SUCH FACTORS INCLUDE, BUT ARE NOT LIMITED TO,       
THOSE DESCRIBED IN THE COMPANY'S FILINGS WITH THE SECURITIES AND EXCHANGE       
COMMISSION. THE COMPANY DOES NOT UNDERTAKE TO PUBLICLY UPDATE OR REVISE ITS     
FORWARD-LOOKING STATEMENTS EVEN IF EXPERIENCE OR FUTURE CHANGES MAKE IT CLEAR   
THAT ANY PROJECTED RESULTS EXPRESSED OR IMPLIED THEREIN WILL NOT BE REALIZED.   

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘8-K’ Filing		Date		First		Last			Other Filings
Filed on:		1/27/99
For Period End:		1/22/99		1
		10/31/98		2					10-Q,  NT 10-Q
									List all Filings