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Barbeques Galore files for bankruptcy

August 19, 2008|From Bloomberg News

Barbeques Galore Inc. is feeling the heat of the real estate downturn.

Chief Executive Jeffrey Sears said "the general collapse of the market from home sales" and the company's inability to obtain financing forced the Carlsbad, Calif.-based retailer of barbecue grills to file for Chapter 11 bankruptcy protection last week.

Barbeques Galore said it planned to sell the company or form "a consensual liquidating plan" with its bank lenders.

The company operates 65 stores in the U.S., according to court documents. Affiliate Barbeques Galore Ltd., based in Auburn, Australia, and not included in the filing, was acquired by Australian buyout firm Ironbridge Capital in August 2005.

The first Barbeques Galore store opened in 1980. From 1997 to 2005, the company traded on the New York Stock Exchange and Nasdaq before its acquisition. After a split of Australian and U.S. operations in 2007, each company has had a separate board and financing. Barbeques Galore is owned by holding companies that also belong to Ironbridge.

The company's stores, concentrated in California, Texas, Arizona and Nevada, have 400 employees. Barbeques Galore sells its own brand, manufactured in China, alongside grills from Viking, Weber, Lynx and Twin Eagles.

Ironbridge bought the company just before housing sales started to decline, Barbeques Galore said. It cited annual revenue of $102.3 million for its fiscal year ended Jan. 31, down 18% from $124.2 million two years ago. It projects another 18% decline for fiscal 2009.

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