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RoomStore files for Chapter 11

Monday - 12/12/2011, 3:35pm  ET

Richmond-based furniture retailer The RoomStore Inc. has filed for Chapter 11 bankruptcy protection and says it will close a significant number of its stores.

The RoomStore has 63 retail locations in eight states including Maryland and Virginia. Eleven of its 63 stores are in the Washington area.

“The company believes it has developed a plan that will enable it to reorganize around a core base of stores,” it said in a regulatory filing. “The reorganization of the company is expected to result in the closing of a significant number of stores and reductions in staffing and overhead expenses.”

RoomStore has secured a commitment from Wells Fargo Bank for a $14 million Debtor-In-Possession loan. It says it will continue to operate all of its stores while it completes the restructuring.

RoomStore also holds a 65 percent stake in Mattress Discounters Group and will retain its stake as part of its reorganization.