ATLANTA-Rhodes Inc., one of the largest and oldest furniture retailers in the country, has received permission from the US Bankruptcy Court here to close 26 of its 89 stores in nine states and dispose of 24 properties immediately. Rhodes filed for Chapter 11 protection Nov. 3.

The 125-year-old, privately owned company has retained DJM Asset Management of Melville, NY to sell 21 Rhodes Furniture stores and warehouses and three John M. Smyth's Homemakers Furniture stores totaling an estimated 1.2 million sf. The Bankruptcy Court still has to approve DJM, according to the liquidator.

Rhodes plans to close Atlanta area stores in Doraville and near the Perimeter Mall but will continue operating 12 other metro locations, according to the company. In its preliminary bankruptcy petition, the retailer listed 30 of its largest creditors who are owed $17 million. The company lost $19 million last year, according to its filing.

The company says it has obtained $88 million in new financing from Wells Fargo Retail Finance to use in its restructuring phase. The money will be used to fund daily operations and to pay staff. The stores and warehouses that will be sold range in size from 27,809 sf to 113,250 sf, according to Andy Graiser, co-CEO of DJM Asset Management.

The properties are located in both strip centers and free-standing buildings. "Since many of the stores are in well-established locations, have long lease terms and contain below market rental rates, we expect quite a number of interested parties to submit offers to purchase leases," Graiser says. "The locations can be acquired individually or in packages of two or more, with all bids subject to bankruptcy court approval."

The two Atlanta area stores are at 4715 Ashford Dunwoody Rd. near the 1.4-million-sf Perimeter Mall in North Fulton County and at 4363 NE Express Access Road in Doraville. Besides Georgia, the properties to be liquidated are in North Carolina, South Carolina, Illinois, Kansas, Kentucky, Missouri, Ohio and Tennessee.

"We expect most of the locations to operate through the end of March 2005 with the exception of six stores which are expected to close at the end of January 2005," Vicki Johnson, corporate counsel and director of real estate at Rhodes Inc., says in a prepared statement. The disposition of the 24 locations is a key component of Rhodes' restructuring in its Chapter 11 bankruptcy case, the company says.

Amos G. Rhodes founded Rhodes Furniture in 1879 and had Rhodes Hall built in 1904 as his primary residence. His family lived there until his death in 1928. At that time, the building was donated to the State of Georgia which still owns the property. The state has been leasing the building to the Georgia Trust, a preservation organization, since 1983, Alison Tyrer, communications director, the Georgia Trust for Historic Preservation, tells GlobeSt.com.