Z Gallerie Inc., a home furnishings chain that operates 57 stores including one at Sugar Land Town Square, has filed for bankruptcy protection, citing a “severe” drop in sales since 2006.
The private company, based in Gardena, Calif., closed 21 stores earlier this year, but said in its Chapter 11 filing it intends to continue operating currently open stores.
Employees at the Sugar Land store, at 2180 Lone Star Drive, indicated that location will remain open, but referred questions to a Los Angeles company spokesman who didn’t return a call seeking comment.
Z Gallerie said it has about $25 million in debts held by about 134,000 creditors.
Company sales peaked in 2006 at $236 million, but since then sales dropped sharply, “with this decline accelerating in the last quarter of 2008 and continuing unabated in the first quarter of 2009,” Z Gallerie said in its bankruptcy filing.
Pricing pressure in retail home furnishings due to promotions by competitors and going-out-of-business sales, along with approaching maturity of company debt, forced the bankruptcy, Z Gallerie said.
