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Retailer Jay Jacobs Folds -- Early Linux Adopter Files for Chapter 11

Sep 07, 1999, 02:07 (9 Talkback[s])
(Other stories by Dwight Johnson)

By Dwight Johnson, Linux Today

Jay Jacobs, Inc., the Seattle-based specialty apparel chain retailer which boldly announced last November it would deploy Linux across its entire chain of stores, announced Friday it has filed for Chapter 11 bankruptcy and will begin liquidation of its assets.

Jay Jacobs had been in the process of deploying an application suite for management and Point Of Sale (POS) on Linux in its 114 stores in 22 states and at the company's headquarters. Scheduled to be completed by the end of this year, the project would have replaced a system of outdated DOS computers that used Paradox.

Apropos Retail Management Systems Inc. was the developer of the new application suite which was powered by the Informix database. The company claimed it would save $1,000 per computer by using Linux.

At Jay Jacobs, the manager workstation was supposed to use X Windows and double as an information terminal, while the point-of-sale (POS) modules for checkouts would have used a character interface, as did the DOS-based computers they were replacing.

In connection with the bankruptcy, the liquidation of assets will be overseen by William L. Lawrence, Jr., the Company's Chief Financial Officer, who was instrumental in the selection of Linux for deployment across the Jay Jacobs stores.

"The decision to shut down our business was extremely difficult to make... Until the very end, we were actively working with various investors to achieve a successful reorganization. Unfortunately, a deal could not be put together given the time constraints... As a result, a Chapter 11 filing became the only viable option. If there are any opportunities to restructure the Company even after the filing, we will pursue them," Lawrence said.

A press release issued by Jay Jacobs Friday noted:

"The Company was founded in 1941. Founder Jay Jacobs resigned as Chairman of the Board in June 1997 and as a board member in November 1997. By the late 1980s, the Company operated approximately 300 stores nationwide. In the early 1990s, however, it suffered from increased competition and expansion costs, leading to bankruptcy in May 1994. After closing numerous stores and shifting focus, the Company emerged from Chapter 11 after confirmation of its plan of reorganization the following year. In October 1995, the Company operated 153 stores. Since confirmation, however, the Company faced generally declining sales, net store closures, and a shortage of capital. In December 1997, the Bankruptcy Court approved a recapitalization as a modification to the 1995 reorganization plan, but liquidity problems escalated from October 1998 forward."