RICHMOND, Va. (AP) – Menswear chain S&K Famous Brands Inc. filed for Chapter 11 bankruptcy protection on Monday, citing operational losses over the past year.

The Richmond, Va.-based chain, which sells value-priced clothing in about 136 stores in 23 states throughout the East Coast and Midwest, also attributed the move to tightening credit and slowed consumer spending.

S&K stores, mainly in strip malls, offer men’s suits, sport coats, pants, shirts, ties and shoes for sale and tuxedoes for rent.

CEO Joseph A. Oliver III said in a news release that the company wants to cut its debt and build new capital as quickly as possible.

“We will continue to do what it takes to reduce operating costs and improve our operations,” Oliver said. “Our goal is for this process to be the final step towards building a specialty retail chain that can prosper in the future.”

S&K, which has about 1,095 full- and part-time employees, said it had $41.4 million in assets and $35.5 million in liabilities as of Jan. 1, according to its initial filings. Its biggest creditors include GMAC Financial Services, which it owes $2.28 million, and construction company Allegheny Design Management, which it owes $1.14 million.

The company experienced its first annual loss in its 38-year history in the fiscal year that ended in February 2008, of about $3.93 million, Richard H. Hardy Jr., the company’s vice president of finance and information technology, said in court documents. Its revenue that year was $156.9 million. The company went on to lose money in the following three quarters as well.

“Despite a tremendously loyal cadre of longtime customers and a world-class team of talented employees, the company has experienced a liquidity crisis which requires that it complete its operational and financial restructuring in Chapter 11,” Hardy said.

At a hearing in U.S. Bankruptcy Court in Richmond, Judge Kevin Huennekens gave interim approval to $13 million in debtor-in-possession financing. He also authorized the company to break leases at stores it has already closed and reject more than 22 contracts for things like deferred compensation and cell phones.

As part of its financing agreement, S&K is to sell its headquarters by mid-May for a minimum of $5.5 million, attorneys said at the hearing.

The company also plans to liquidate additional underperforming stores.

In late 2008, S&K announced several initiatives to improve its financial performance, including hiring liquidators to conduct store closing sales at 78 locations and cutting about 50 positions at its headquarters. It has since eliminated 12 more corporate positions. It also hired Alvarez and Marsal LLC as strategic advisers and announced plans to move store locations, reduce inventory and redesign its stores.

Attorneys for the company also said Oliver took a voluntary pay cut of more than $50,000 before the company sought bankruptcy protection.

The publicly held company was delisted from NASDAQ in March 2005 and has been trading the over the counter since.

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