Peter Elitzer, the owner of two retail clothing chains, was looking at the prospect of one operation that was facing bankruptcy adversely affecting the other until Buxbaum Group proposed a solution.

One of the chains—off-price family clothier Peter Harris, which had expanded to 26 locations in Upstate New York, Vermont, and Massachusetts under the Peter Harris and Label Shopper logos—was turning a substantial profit. It was its sister operation, the 32-unit Priceless Kids chain founded in 1990, that had gotten into trouble.

Priceless Kids sold off-price children’s clothing, a potentially lucrative market. However, the regional chain was undercapitalized, and in recent years it began to fall into a negative spiral. Slow to pay its bills, Priceless Kids found vendors reluctant to ship the goods it needed. This led to thin inventories and in-stock problems, which further impaired the chain’s ability to maintain a positive cash flow. With Elitzer’s line of credit tied into both chains, Peter Harris’ fortunes were unavoidably linked to those of its sister company. In fact, a loan for Priceless Kids was backed by the assets of Peter Harris.

Buxbaum Group was called in to represent Stonehill Financial, the holder of the loan note, just as Webster Bank, the line-of-credit lender, was calling for a liquidation sale of Priceless Kids to satisfy that chain’s debt. Spearheading Buxbaum Group’s effort, Executive VP Stevan Buxbaum determined that a liquidation would return nothing to Stonehill Financial, and that even the line-of-credit lender probably wouldn’t come out whole.

“It was a difficult situation,” recalls Elitzer. “We had a substantial amount of indebtedness and two lenders with very different orientations. But Buxbaum Group did an extraordinary job of bringing them together, sorting out the values of our ongoing business, and laying out our options.”

Though Priceless Kids was a drag on Peter Harris, Buxbaum Group saw that the chain could be a profitable venture with stronger capitalization. With that in mind, Stevan Buxbaum became integrally involved in discussions with a buyer that had previously expressed interest in the chain. Thanks to Buxbaum Group’s network of contacts in the retail world, alternative buyers were waiting in the wings in the event that deal fell through. In the end, an agreement was hammered out with the original prospect. The deal included an agreement that Priceless Kids would continue to share Peter Harris’ distribution facility.

The proceeds from the sale of Priceless Kids went toward satisfying the chain’s debt to Stonehill Financial. And without the profit drain of Priceless Kids, Elitzer was able to restructure Peter Harris’ line of credit and extend it for three more years. Priceless Kids’ vendors weren’t forgotten. In accordance with the purchase agreement, the chain’s new owners made good on all its outstanding debts. “That was important to us,” says Elitzer. “We wanted to do right by people who had stuck with us.”

In addition, the more than 500 employees of the two chains, some of whom had been with Elitzer for decades, all kept their jobs. “That,” notes Stevan Buxbaum, “was an especially heartening result for all parties concerned.”

“Buxbaum Group was outstanding throughout the entire process,” concludes Elitzer. “It wasn’t easy to find a solution, but they did it, and the result is a situation where everyone came out a winner.”

When the owner of Zarfas Luggage perished in a car accident, his family was left to operate his eight retail locations in Missouri, Texas, Arizona and New Mexico. Unfortunately, his heirs were overmatched when it came to running a retail chain. Said Stevan Buxbaum, Executive VP of Buxbaum Group: “Buyers applied their personal taste to merchandising decisions rather than following established sales. Luggage inventory became depleted while lower-turning giftware inventory became bloated.”

A year later, Zarfas couldn’t pay its merchandise debts and was looking at the prospect of an expensive bankruptcy. What’s more, personal guarantees on store leases were going to force family members to declare bankruptcies of their own.

Called in at this juncture by the retailer, Buxbaum Group opted for an assignment for the benefit of creditors—a more streamlined and cost effective approach than filing for bankruptcy. The firm ran a very successful inventory sale in the stores, giving creditors a substantial settlement. At the same time, Stevan Buxbaum found luggage retailers who were willing and able to assume Zarfas’ lease obligations, releasing the family from the burden of personal guarantees and saving the expenses involved in bankruptcy.