Whitesburg KY

Dawahare’s closing all stores

Dawahare’s, the family clothing chain which was formed in Letcher County 101 years ago, is closing its Whitesburg store and other 21 locations between Pikeville and Paducah.

The closing is expected to affect about five full-time employees at the Whitesburg location, the oldest in the chain, and will leave a big hole in the city’s Main Street.

The closings here and elsewhere will not affect the smaller Hoover’s Home Furnishings chain, whose stores remain profitable at four locations between Whitesburg and Hazard.

The Lexington-based chain filed notice in U.S. Bankruptcy Court last week that it has been unable to raise the cash to continue operating and will shut down Sept. 30.

“Our goal was to produce and to implement a plan which would allow the company to keep the 22 stores open, and ultimately to be able to satisfy our secured, and possibly some other creditors,” company president Harding Dawahare said in a written statement.” He said that after a month of trying, closing was the only option.

The company said it has been unable to get loans to complete the restructuring proposed in its late May bankruptcy reorganization filing.

Dawahare’s said it expects liquidation of its 22 Dawahare’s and Cat Bird Seat stores to begin July 14 and to end by Sept. 30. About 400 employees statewide are affected, in addition to the 107 who lost jobs in the first round of store closings.

The company filed for chapter 11 reorganization on May 30, declaring nearly $9.3 million in debts and about $10 million in assets. Its largest creditor is Fifth Third Bank, which was owed nearly $5 million when the filing was made.

The company, which also operates as The Cat Bird Seat, announced at the time it was closing stores in Owensboro, Bowling Green, Paducah, Glasgow, Maysville, Mt. Sterling, Campbellsville, Newport and Bluefield, W.Va.

The company said in its bankruptcy filing that selling the remaining 22 stores “as going concerns will not bring enough cash to come near paying the bank in full.” Dawahare’s said it doesn’t have the right inventory of clothing for continued business and that it would need substantial cash from Fifth Third “with no reasonable chance of recovering such cash” to fix the problem.

The company also said the value of its stores would be impaired if they are sold without the necessary merchandise for the upcoming Christmas season.

“We are distressed – for our employees, our family, and for the thousands of loyal customers who have relied on Dawahare’s stores for clothing for their entire family for up to three generations. However, we hope to be able to exit the retail arena in Kentucky the way our family entered it a century ago – with dignity.”

Dawahare’s was founded in 1907 by S.F. Dawahare, a native of Syria, who began as a peddler in eastern Kentucku coal camps. He opened his first store about 1911 in East Jenkins.

Leave a Reply