Published: January 30, 2008 11:59 am      

Parent company of Value City sells chain

CUMBERLAND - Value City, a discount department store, has been sold by its parent company but it's unclear whether the Cumberland store will say goodbye anytime soon.

A number of people, from city staff to the owner of the Queen City Drive complex to the local manager, said they weren't aware of a possible closure. An ad scheduled to run in the Times-News, however, announces "Everything is on Sale."

"I don't know that it is closing," Jan Kallemeyn of Eldon W. Gottschalk & Associates Inc. of Huntington Beach, Calif., which is handling the advertising order, said. "The ad says everything is on sale. I don't know which stores are closing and which are not."

Terri Bennett, the city's economic development specialist, said when rumors circulated before, she was told the store's business was solid and wouldn't be closing.

That supports what an official with Madison Realty Group of Pittsburgh, which owns the Cumberland shopping complex, said in November. Sam Rossi said the store was performing well and had all intentions of staying, to the best of his knowledge.

When contacted Monday, a man who answered the phone at Madison refused to give his name but said the company had not heard the store would close.

Retail Ventures Inc. of Columbus, Ohio, announced last week it sold 81 percent of its interest in the Value City Department Stores chain to VCHI Acquisition Co. That company formed from the private equity firms of VCDS Acquisition Holdings LLC, Emerald Capital Management LLC and Crystal Value LLC.

A number for VCHI could not be found.

According to a press release from Retail Ventures, the company will not receive any cash proceeds from the sale but rather will pay a $500,000 fee to VCHI. Retail also believes it will suffer an "after-tax loss." The deal allows VCHI to purchase 150,000 shares of common stock of Retail Ventures for $10 per share.

The stores had been put on the market more than a year ago. Burlington Coat Factory Warehouse Corp. announced in October that it would purchase 24 of the 113 stores.

One such store is in Greenbelt, which already has announced that Burlington intends to take over the 130,000-square-foot store in Prince George's County. The Maryland Department of Labor, Licensing and Regulation has said that store will close Feb. 15.

About 8,600 people are employed at the 113 Value City stores, with seven stores in Maryland. The transaction does not affect Value City furniture stores, which are owned and operated separately.

Downtown lost another of its bargain stores last spring when Dollar General closed its doors at 138 Baltimore St. at the corner of the Value City complex.