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Clothes Chain Mr. Rags Files for Chapter 11

January 30, 2003|Leslie Earnest

Mr. Rags Acquisition Inc., a clothing chain that sells surf, skate and urban brands to teens and young adults, has filed for Chapter 11 bankruptcy protection.

The Long Beach-based chain, which was purchased eight months ago from teen accessories retailer Claire's Stores Inc., has struggled with a wide range of troubles, including weak sales, high rents and poorly located stores, President Gary Schettino said.

Mr. Rags also tried to do "too many things in one box" by selling surf and skate apparel brands such as Billabong and Hurley, along with urban brands such as Ecko and Enyce, Schettino said.

"We're in the process of redefining the direction that we're going to take the company going forward," he said. "There's so much opportunity for this brand."

The retailer operates 114 mall-based stores, including about 30 in California, its strongest market.

The company will continue to operate while it closes about 14 stores in undisclosed locations, Schettino said.

The bankruptcy petition was filed Tuesday in U.S. Bankruptcy Court in Santa Ana.

Mr. Rags is owned by a private investment group led by Ivan Spiers and Bruce Friedman, two Orange County businessmen. Neither could be reached for comment.

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