Some of the founders and employees of the bankrupt Norwegian retail clothing chain Moods of Norway have submitted the highest bid to buy back the chain’s bankruptcy estate with the aim of starting over. Their purchase includes warehouse and store inventory, units like Moods USA and Moods Sverige, “the brand, of course, everything,” Moods’ chairman Jan Egil Flo exclaimed to local newspaper Fjordingen on Wednesday.
News bureau NTB reported that Flo, founder Simen Staalnacke and a group of employees intend to keep the company’s headquarters in the mountain town of Stryn. Employees who haven’t already found a new job since Moods of Norway went into bankruptcy last month can get their old jobs back.
Plans call for reopening Moods’ stores this weekend for clearance sales through the end of the year. “After that we need to find out what kind of operation we’ll have and how we’ll organize it,” Flo said. “The number of stores we’ll have in the future, for example, is uncertain.”
Details of the plan were sketchy but bankruptcy administrator Asbjørn Løvik said several potential buyers were interested in Moods’ estate. “Several submitted bids and the group that had the the highest bid got it,” Løvik said. The deadline for filing claims against the estate was set for October 18.
Newspaper Dagens Næringsliv (DN) reported shortly after the bankruptcy filing in September that the Moods founders built up sizeable fortunes during the years when Moods was successful. Tax returns for 2016 show Staalnacke, for example, with a taxable fortune of NOK 14.1 million, while his own company had capital of NOK 25.7 million. Flo’s fortune was much bigger, at NOK 46.9 million and share capital in his private firm of NOK 27.6 million.
They had also managed to borrow another NOK 5 million from the public sector business development agency Innovation Norway as late as February. Innovation Norway, which offers financial support to both entreneurs and and companies trying to expand, is now a creditor but reportedly has some secured assets in Moods’ inventory.
Now Flo and Staalnacke seem to be putting their own money into Moods. “We have to save the company, we still have faith in it,” Flo told DN. He wouldn’t say what the group paid for Moods’ estate, but he told DN there were three other bidders. Flo, Staalnacke and the employee group also won the support of the local bank in Stryn, Sparebanken Sogn og Fjordane, which had prompted the bankruptcy when it stopped extending credit ot Moods. “It’s the bank we’ve always used,” Flo said. It also has some security in Moods’ inventory, according to DN.
Flo claimed the group had learned from their mistakes, and there would be no efforts to open 20 stores in the US again, “that’s for sure!” He claimed they had done “a lot of right things, too, so when we’ve spent a month cleaning up and having clearance sales, we’ll figure out how we’ll move forward from the New Year.” He expected Moods stores to resume operations until Christmas, with its remaining store in Los Angeles likely to operate until its lease runs out in July next year.