Sam Ash Music filed for Chapter 11 on May 8 in bankruptcy court in New Jersey.
This move comes after the company announced on May 2 it would be closing all of its 42 stores nationwide after 100 years in business.
“Unfortunately, in today’s post-COVID environment, the challenges to our brick-and-mortar business have necessitated a restructuring,” David Ash, Sam Ash Music CEO, said in a statement on May 9. “We are exploring a number of strategic options in conjunction with these inventory sales. We believe that a restructuring of our liabilities and a potential sale of the business or portions of the business is the best path forward to unlock and maximize value for the benefit of the company’s stakeholders.”
The retailer is said to be evaluating a potential sale of its e-commerce operations, related intellectual property and its wholesale Samson business as a go-forward strategy.
According to bankruptcy documents, before filing for Chapter 11, Sam Ash had less than $1 million in available cash with its loan advances exceeding its borrowing base. Jordan Meyers has been appointed as the company’s chief restructuring officer. Court filings detailed that Sam Ash Music experienced difficulty paying landlords and vendors in April, which disrupted its inventory supply and caused the company to be locked out of one of its stores.
“The inability to receive a continuous flow of inventory negatively impacted store sales and e-commerce,” Meyers said.
Sam Ash Music’s liabilities and assets each range between $100–$500 million.
According to the bankruptcy documents, Sam Ash Music’s debts include $1.89 million to Yamaha Corporation of America; $946,000 to Bosch Security Systems; nearly $800,000 to Hoshino USA; and nearly $775,000 to Roland U.S.
