Kid Brands Inc., a leading U.S. manufacturer of children's furniture, has recently filed for bankruptcy protection in the Newark Federal Bankruptcy Court in New Jersey. The company is now seeking to sell off most of its assets, including several subsidiaries such as Kids Line, LLC, LaJobi, Sassy, and CoCaLo, all of which are reportedly facing severe financial challenges. According to the filing, the company currently holds $32.4 million in assets but is burdened with liabilities exceeding $109 million, signaling a deep financial crisis.
Before declaring bankruptcy, Kid Brands had over 30 unsecured creditors, with the U.S. Customs and Border Protection being the largest, owing $14 million in unpaid tariffs on bedroom furniture imported from China. Other major creditors include Asian-based manufacturers, such as Jiashan Zhenxuan Furniture Co., Ltd., which is owed $2.08 million, Sino Universe Limited with $1.4 million, and Johnsonwood Furniture, which is owed a staggering $90.2 million.
The company’s financial struggles have been evident for some time. In April, it disclosed that net sales had dropped significantly, with a net loss of $28.89 million in 2013. A recent report showed that the first quarter of this year resulted in a net loss of $31.7 million, with sales reaching only $38 million—down from $51.4 million in the same period last year. This decline reflects ongoing difficulties in maintaining profitability.
In addition, Kid Brands announced plans to shut down its JaJobi subsidiary, which specializes in cradle and other children's furniture products. Earlier this month, the company also terminated its licensing agreement with Graco Children, ending its role as a designer and manufacturer of cribs, adjustable tables, chairs, cabinets, and other baby and youth furniture items.
To keep operations running during the reorganization process, Kid Brands has sought a $49 million debtor-in-possession financing plan. This move aims to provide the necessary capital to continue functioning while navigating the bankruptcy process and potentially restructuring the business for future stability.
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