Tattered Cowl, a trailblazer among the many nation’s impartial bookstores and a part of the Denver group for greater than a half-century, might have new homeowners as early as this summer time, in accordance with the CEO guiding the chain by way of chapter reorganization.
Brad Dempsey, who took over as CEO in July, filed an amended reorganization plan Friday with the U.S. Chapter Courtroom in Denver. He stated non-disclosure agreements have been signed with varied events and the corporate is vetting potential patrons.
“I’m very comfy that we’ve got actually stable curiosity on this and it ranges from people to company entities that I believe do have the wherewithal,” Dempsey stated.
However Dempsey and Bended Web page, the group that purchased the bookstore in 2020, are also on the lookout for a purchaser who will preserve its tradition and focus.
“The Tattered Cowl is an extremely highly effective model throughout the nation,” Dempsey stated. “My aim is to develop a gaggle of patrons who’re devoted to persevering with the thought of the Tattered Cowl and the enterprise of the Tattered Cowl as a going concern, with its operations, its staff and its legacy, notably its First Modification legacy.”
Tattered Cowl’s renown as a fierce proponent of the First Modification was solid by Joyce Meskis, who purchased the shop in 1974 when it was a small store in Denver’s Cherry Creek North neighborhood. Below her possession, Tattered Cowl, with its comfy arm chairs and comfy nooks, turned a gathering place, a middle of group occasions and a crusader towards censorship.
Meskis efficiently challenged a 1984 legislation criminalizing the sale of sexually oriented materials to minors and prevailed over calls for by police for a suspected drug vendor’s book-buying historical past. She stated the knowledge was constitutionally protected.
Meskis obtained a PEN American Heart award in 1995 for defending freedom of speech and expression. She based the Colorado Freedom of Expression Basis, a nonprofit devoted to informing the general public concerning the First Modification.
In 2015, Meskis introduced plans to promote the Tattered Cowl bookstores. Guide-industry veterans Len Vlahos and his spouse Kristen Gilligan joined the corporate’s administration workforce and purchased controlling curiosity within the enterprise in 2017. Meskis retired that 12 months. She died in December 2022 at 80.
The Colorado-based funding group Bended Web page purchased Tattered Cowl in 2020. The founding companions had been Kwame Spearman and David Again. Spearman, the bookstore chain’s CEO, took a depart to run for Denver mayor after which stepped down forward of an unsuccessful run for the Denver college board.
The Bended Web page board employed Dempsey, a chapter lawyer, as outdoors counsel. He was named CEO after an interim stint — and is a longtime fan of Tattered Cowl.
“It’s the place I purchased my first guide. It’s the place I’d take girlfriends on dates,” Dempsey stated.
He admired Meskis’ profession and her help of First Modification rights, which he has fought for in courtroom. As Tattered Cowl struggled financially, Dempsey helped negotiate hire deferrals for the corporate and was on the helm when it filed for Chapter 11 chapter in October.
how Tattered Cowl reached a monetary brink, Dempsey cited the COVID-19 pandemic, which devastated many small companies. Like different impartial bookstores, Tattered Cowl additionally faces relentless competitors from such on-line titans as Amazon.
Dempsey additionally believes the earlier purchases of the bookstores had been under-financed. To stem losses, Tattered Cowl closed three of its seven shops and eradicated roughly 1 / 4 of the corporate’s jobs in late 2023. Practically 70 individuals are nonetheless on employees.
The Denver shops on East Colfax Avenue and in Union Station in Decrease Downtown and within the Aspen Grove buying middle in Littleton stay open. Tattered Cowl additionally has a kids’s retailer within the Stanley Market in Aurora.
Dempsey is filled with reward for Tattered Cowl staff, a lot of whom have been on employees for a number of years.
“A lot of occasions in a chapter case, the board, senior officers and employees all hit the exits. All people right here stayed and doubled down with me,” he stated.
A $1.275 million mortgage from Learn Colorado LLC allowed Tattered Cowl to beef up its stock and get extra books on the cabinets in time for the vacations late final 12 months, Dempsey stated. Tattered Cowl had been on a credit score maintain with most publishers.
A profitable run throughout the holidays has bolstered Dempsey’s optimism about Tattered Cowl’s future. Gross sales elevated barely in December, flattened out in January after which rose by 14% in February and 20% in March, he stated.
Among the bookseller’s occasions, together with a chat by historian and Pulitzer Prize-winning author Doris Kearns Goodwin, have offered out. Dempsey expects an enormous crowd Saturday, which is Unbiased Bookstore Day.
Tattered Cowl has employed folks to up its social media recreation and plans to modernize its on-line presence.
The amended reorganization plan filed Friday refers to “liquidation.” Dempsey stated Bended Web page, not Tattered Cowl, shall be liquidated after a sale. The corporate will submit one other set of paperwork to incorporate proposed bid procedures, he stated.
“Proper now our projection is that we might attempt to have closing bids in by the top of Might, the public sale by the primary half of June,” Dempsey stated.
The transaction might shut in July.
Tattered Cowl’s debt consists of about $1.7 million in secured claims. A type of is the mortgage from Learn Colorado, made up of the Rainbolt Belief and philanthropist Margie Gart, whose household offered the Gart Brothers Sporting Items Co. to Sports activities Authority.
The unsecured debt of $3.4 million consists of claims by distributors, authors and suppliers for Tattered Cowl’s cafes. Secured collectors are paid first.
“I really feel optimistic,” stated Paula Bisgard, when requested about her outlook given all of the adjustments at Tattered Cowl.
Bisgard has labored for Tattered Cowl for twenty-four years, however was launched to the shop in 1971. She had simply graduated from highschool and heard a few new bookstore in Cherry Creek. “Tattered Cowl has been part of my life for many of my life.”
When Bisgard was coaching for the job, Meskis walked in and informed everybody there that they had been now booksellers. The encounter made an impression.
“I like to consider us not solely as staff however as booksellers,” stated Bisgard, who added that Tattered Cowl is a vacation spot for locals in addition to folks from different states and international locations.
“I believe we’ve got good management who will weigh the attainable choices and discover a good match for the shop,” she stated. “I believe there’s been good intention to protect the tradition of the Tattered Cowl.”
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