Dirt Cheap closing store here after bankruptcy
Dirt Cheap, the popular discount retail chain known for its budget-friendly prices, has filed for Chapter 11 bankruptcy protection and has announced its Philadelphia store will close.
Signs announcing the closing are up at the Philadelphia store in the Vowell's Market Place shopping center, 716 Pecan Ave #1.
On October 10, 2024, HDC Holdings II LLC, the parent company of Dirt Cheap and its sister stores, including Dirt Cheap Building Supplies and Treasure Hunt, took this significant step in the District of Delaware bankruptcy court.
The Rise and Fall
Once a thriving player in the discount retail market, Dirt Cheap had become a go-to destination for bargain hunters. However, as the retail landscape evolved, the company faced mounting challenges that ultimately led to its financial downfall.
By mid-2024, Dirt Cheap was burning through cash at an alarming rate—up to $1 million per week. The loss of its line of credit further exacerbated the situation, leaving the company with dwindling liquidity despite efforts to secure additional funding.
The Financial
Breakdown
When HDC Holdings II LLC filed for bankruptcy, it listed estimated liabilities and assets ranging between $100 million to $500 million each.
The company's debt was substantial, including a $29.5 million prepetition asset-based lending facility, a $4 million second lien loan, and a $10.5 million mortgage loan from Hancock Whitney Bank.
Additionally, approximately $32 million in unsecured obligations loomed over the company as it sought a way out.
Closing Time
As part of the bankruptcy proceedings, the company announced plans to close all 68 retail locations, including Philadelphia.
To facilitate this process, they enlisted Hilco Merchant Resources LLC as a liquidation agent.
Looking Ahead
The bankruptcy case is still unfolding, with a second-day hearing scheduled for Nov. 7. This hearing will address any additional issues related to the liquidation process.
For now, Dirt Cheap’s story serves as a poignant reminder of the challenges faced by retailers in an ever-changing economic landscape.