Roslyn-based bedding, blanket and textile firm Northwest Company LLC, which sold blankets with sports team logos, recently filed for Chapter 11 bankruptcy protection in the United States. The company noted in court papers filed last month that tariffs and product shortcomings restricted its cash flow before the novel coronavirus hit the country.
Northwest will seek another round of financing from one of its existing lenders on top of the $29.16 million it has in secured debt, a US media outlet reported citing court filings.Roslyn-based bedding, blanket and textile firm Northwest Company LLC, which sold blankets with sports team logos, recently filed for Chapter 11 bankruptcy protection in the United States. The company noted in court papers filed last month that tariffs and product shortcomings restricted its cash flow before the novel coronavirus hit the country.#
Without additional borrowing, the company "will not have sufficient liquidity to continue to fund [its] operations, fund employee payroll and benefits obligations, pay vendors of necessary goods and services, and satisfy other operational requirements," Northwest chief executive officer and president Ross Auerbach said in a declaration.
The company employs about 118 people.
Concerns with product and supply quality as well as higher tariffs have dogged the company for years, according to Auerbach.
In 2017, The Northwest Company acquired a sports-branded backpack and accessories line sold primarily through Walmart, but ‘quality control issues’ cut into sales and the products were less profitable than anticipated, Auerbach noted in his declaration.
Then the caliber of material from Ashford Textiles USA LLC, a key Northwest vendor, lagged enough that Walmart reduced, and ultimately cancelled, Northwest’s part in a youth bedding program, according to him.
Northwest's struggles deepened when the federal government imposed a 25 per cent tariff on bags and backpacks imported from China in 2018, according to court filings. The coronavirus public health crisis and declines in the retail sector exacerbated the company's issues, the filings noted.
Northwest and its subsidiary The Northwest.com LLC are now seeking additional financing from CIT Group/Commercial Services Inc.
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