The interior of Tattered Cover’s Colfax location. (Photo courtesy of Tattered Cover)
Tattered Cover has entertained offers to buy it in recent weeks and now believes that a sale would be the best outcome, the bankrupt bookstore chain announced Friday.
“The company’s board of directors…determined last week that positioning Tattered Cover for sale to a qualified, committed new owner is in the best long-term interests of the company, current investors, employees, suppliers and Colorado’s literary community,” it said.
Tattered Cover said that it “is in discussions with individuals and businesses across the U.S. and expects additional interest from other potential buyers” as word spreads that it’s for sale. The company declined to elaborate on who is interested and declined interviews.
Tattered Cover filed for Chapter 11 bankruptcy in October and quickly shed four locations and 30 employees as it sought to claw its way back into the black. After a robust holiday season, the company reported losses of $340,000 in January and $214,000 in February. The February figure, included in a court filing last month, is worse than the $110,000 loss the company had projected for the month.
The company’s board of directors includes members of Read Colorado LLC, a company formed by Dr. Leslie Rainbolt and Denver philanthropist Margie Gart late last year to prop up Tattered Cover through a $1.3 million loan. On Friday, CEO Brad Dempsey credited that loan with keeping the company afloat the past six months.
“Read Colorado’s debtor-in-possession loan was the lifeline that allowed Tattered Cover to rework itself into a strong position to be acquired by people who share our commitment to independent bookstores,” Dempsey said in a company press release.
Kwame Spearman, Tattered Cover’s former CEO.
The decision to sell marks a change for the venerable bookstore chain, which acquired new owners just over three years ago, in late 2020. When Tattered Cover filed for bankruptcy, it said there were no plans for a sale, though there have been hints of offers since then.
“I have been in conversation with … people who might want to be putting in bids to acquire the company,” shareholder and former CEO Kwame Spearman said at a Feb. 12 hearing.
Asked Friday if he is a prospective buyer, Spearman said that he is “working behind the scenes to explore paths that are in the best service” of the company and its employees.
“I would love for TC to continue its role as a pillar in the community,” he told BusinessDen. “That said, there are real headwinds that brick-and-mortar bookshops face in today’s economy.”
Last week’s news of a potential sale will likely push back a May hearing that was to determine whether Tattered Cover’s reorganization plan is viable. The company wants U.S. Bankruptcy Court Judge Michael Romero to reschedule while it talks with possible buyers.
The interior of Tattered Cover’s Colfax location. (Photo courtesy of Tattered Cover)
Tattered Cover has entertained offers to buy it in recent weeks and now believes that a sale would be the best outcome, the bankrupt bookstore chain announced Friday.
“The company’s board of directors…determined last week that positioning Tattered Cover for sale to a qualified, committed new owner is in the best long-term interests of the company, current investors, employees, suppliers and Colorado’s literary community,” it said.
Tattered Cover said that it “is in discussions with individuals and businesses across the U.S. and expects additional interest from other potential buyers” as word spreads that it’s for sale. The company declined to elaborate on who is interested and declined interviews.
Tattered Cover filed for Chapter 11 bankruptcy in October and quickly shed four locations and 30 employees as it sought to claw its way back into the black. After a robust holiday season, the company reported losses of $340,000 in January and $214,000 in February. The February figure, included in a court filing last month, is worse than the $110,000 loss the company had projected for the month.
The company’s board of directors includes members of Read Colorado LLC, a company formed by Dr. Leslie Rainbolt and Denver philanthropist Margie Gart late last year to prop up Tattered Cover through a $1.3 million loan. On Friday, CEO Brad Dempsey credited that loan with keeping the company afloat the past six months.
“Read Colorado’s debtor-in-possession loan was the lifeline that allowed Tattered Cover to rework itself into a strong position to be acquired by people who share our commitment to independent bookstores,” Dempsey said in a company press release.
Kwame Spearman, Tattered Cover’s former CEO.
The decision to sell marks a change for the venerable bookstore chain, which acquired new owners just over three years ago, in late 2020. When Tattered Cover filed for bankruptcy, it said there were no plans for a sale, though there have been hints of offers since then.
“I have been in conversation with … people who might want to be putting in bids to acquire the company,” shareholder and former CEO Kwame Spearman said at a Feb. 12 hearing.
Asked Friday if he is a prospective buyer, Spearman said that he is “working behind the scenes to explore paths that are in the best service” of the company and its employees.
“I would love for TC to continue its role as a pillar in the community,” he told BusinessDen. “That said, there are real headwinds that brick-and-mortar bookshops face in today’s economy.”
Last week’s news of a potential sale will likely push back a May hearing that was to determine whether Tattered Cover’s reorganization plan is viable. The company wants U.S. Bankruptcy Court Judge Michael Romero to reschedule while it talks with possible buyers.
