Over the past two years, all of us have worked long and hard to make our company a successful family value retailer. Much progress has been made, but our turnaround is far from complete. As you know, sales and profitability continue to be disappointing. While we strongly believe that Venture's repositioning strategy is sound, we need more time to make it workæand without the negative impact of external financial pressures we continue to face.
We are taking the necessary steps today to permit just that. This morning, Venture filed a petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code. This is the first step of a process designed to help us address our financial problems in an orderly way. Hopefully, we can emerge as a stronger retailer.
It's important to note that Venture's reorganization should not affect our customers or most of our associates at this time. There will be no staff cuts at the store level, all of our locations will remain open during normal business hours, and Venture will continue to honor all gift certificates, store credit, layaway arrangements, returns and the like. The reorganization will have absolutely no impact on Venture's retirement and profit sharing plans, which are maintained in separate trust accounts. Pay checks will continue without interruption and medical benefits will also continue for covered associates.
The company will begin immediately to implement efforts to reduce expenses. Unfortunately, this will result in consolidations at our Corporate Office. Specific plans regarding job reductions have not been finalized, but affected associates will be notified as soon as possible and provided with severance benefits.
During the reorganization, Venture will be taking a close look at the financial performance of each store. It is likely that some stores may be closed, but no final decisions about specific locations have been made. If it becomes necessary to close any stores, we will make every effort to give affected associates first consideration for positions that may open at other Venture stores.
I know the past two years have been difficult. I can't say that the road ahead will be any easier. But we are taking the only steps we can to give Venture a fighting chance.
I join the entire management team of Venture in thanking each of you for your contributions and hard work. Without you, we would not have come as far as we have. Working together, we can fulfill our vision of making Venture the family value retailer of choice in our markets.
Answers to Some Associate Questions Regarding Venture's Reorganization:
Is Venture Stores going out of business?
No. Our stores will remain open and continue to operate during regular business hours. Chapter 11 allows us to continue to conduct business while we restructure our financial obligations.
Will Chapter 11 affect the payment of salary or benefits?
Associates should continue to report for work as scheduled and will be paid at the same rate on regularly scheduled pay dates. If you are enrolled in one of our health benefit plans, your coverage will continue without interruption and all qualified claims will be paid. Our profit sharing and retirement plans will also not be affected by the Chapter 11 filing, since all associate and company contributions to these plans are maintained in separate trust accounts that are not part of the reorganization.
Can our customers expect to receive the quality service and merchandise they expect?
Venture will continue to honor all exchanges, gift certificates, refunds, layaways, customer deposits, credit card refunds and all other significant customer-related matters. When dealing with customers, we should reinforce the fact that all of our obligations related to their past, present and future transactions with Venture Stores will be honored.
What should I do if the news media or our suppliers ask about the filing?
We expect to receive a number of calls from concerned suppliers and the media. Should you be contacted by a supplier or representative of the media, please be courteous and refer them to the appropriate sources of information, as follows:
Who should I talk to if I have any questions?
We will try to keep all associates up-to-date on the status and progress of the company. If you have any questions, you should ask your store manager or supervisor. You may also call our associate hotline at 314/281-6469 to hear up-to-date prerecorded information.