WOODBURY, NY-Private equity firm Prentice Capital Management has acquired furniture-chain Levitz Home Furnishings for about $70 million. The deal comes after Levitz's October Chapter 11 bankruptcy filing.

Meanwhile, the company is closing stores in eight states over the next few weeks, bringing the chain's store count to 79, down from 121 at the time of its bankruptcy filing. The move marks the exit of the Connecticut and Philadelphia markets for the retailer, as it aims to focus on the California and New York City metropolitan area, Prentice executives say. Investment firm Great American Group will handle the liquidation.

After the closing of the deal Levitz will enter into a new $55-million credit facility with GE Commercial Finance; Prentice will also invest another $50 million into the retailer. When it filed for Chapter 11, Levitz executives asked the US Bankruptcy Court in the Southern District of New York to approve a $90-million debtor-in-possession credit facility by GE, which was to include an incremental credit facility of $25 million arranged by Prentice.

This is not Prentice's first retail acquisition. The New York City-based firm is in a $9.60-per-share, joint-venture deal to acquire Knoxville, TN-based Goody's Family Clothing. In May it bought stakes in then-bankrupt retailer KB Toys.

Locally based Levitz has previously filed for bankruptcy, in 1997, from which it emerged in 2001. During that period the company closed about half of its stores, leaving it with about 60 units.

Also in 2001, Levitz merged with Seaman Furniture Co., creating a company with 116 stores, about half under the Levitz name and the remainder under Seaman's. In May Levitz changed the Seaman's stores into Levitz units, though the company still sells furniture under the Seaman brand.