Sure Fit Files for Chapter 11

Citing an overly aggressive growth plan as the culprit behind its financial woes, Allentown, PA-based slipcovers manufacturer/marketer Sure Fit filed for Chapter 11 bankruptcy protection on March 8.

“Reason number one is we tried to grow the business too fast,” says senior vice president of marketing Liz Mandracchia. “We built the company’s infrastructure based on continuing levels of growth that didn’t materialize.”

Sure Fit, which Mandracchia says experienced 30% annual growth for seven years prior to 2003, also links its current difficulties to a “strategic” shift from sourcing its merchandise domestically to relying on imports. “A large financial commitment up front was needed, and we were caught in a cash crunch” because of the financial strain importing put on the company, Mandracchia says.

In its bankruptcy filing, the company reports owing more than $42.7 million, including $14.7 million to 20 unsecured creditors and $27.9 million in secured debt, mostly to its bank, Wachovia. Sure Fit laid off about 80 people, executives as well as factory workers, in its New York and Allentown facilities.

The cuts also affect the direct division, which will go from a $60 million business to around $30 million this year, says Mandracchia. Catalog circulation, which was at 28 million in 2003, will drop to around 13 million in 2004, with the elimination of weaker house file names accounting for most of the decrease. Sure Fit will also scale back the frequency of its mailings from eight to four drops a year.

Mandracchia says that Sure Fit will continue the evolution it began with its mailing last year of the Special Decorating Edition, featuring window treatments and bedding. “Customers have been raising their hands to say, I want more, so we have been trying to complete their decorating look,” Mandracchia says. As part of this continuing effort, the company was scheduled at press time to introduce sectional slipcovers on its Website in April and in the print catalog in May.

Meanwhile, Sure Fit is not ruling out the possibility of being acquired by another company. “We are in the process of looking for outside capital,” CEO/president Bert Shlensky said in a statement relayed by Mandracchia, “and are especially considering strategic alliances with somebody who has something that creates a mutually beneficial situation.”

Sure Fit Files for Chapter 11

Slipcover manufacturer/marketer Sure Fit filed for Chapter 11 bankruptcy protection last week. The Allentown, PA-based company, which redesigned its print catalog as part of a rebranding campaign earlier this year, blamed too-rapid expansion and foreign competition for the filing.

Between 1998 and 2002, the company had enjoyed average annual sales growth of 30%. Last year, though, sales fell to $157 million from $180 million in 2002. It lost roughly $7.5 million last year. During the past few months, according to reports, Sure Fit laid off about 80 employees.