Merry-Go-Round Enterprises Inc. hopes to name a new chief executive officer within the next few days, one of its bankruptcy lawyers said yesterday.
As previously reported, knowledgeable sources say that the Joppa-based retailer has reached a tentative agreement to hire Richard Crystal, who runs two specialty-apparel chains and private-label programs for R. H. Macy & Co.
Merry-Go-Round officials have declined to comment on negotiations with Mr. Crystal or confirm that he is the CEO candidate.
But in a hearing yesterday in U.S. Bankruptcy Court in Baltimore, Merry-Go-Round lawyer Richard Wyron said, "We hope to file by Monday a motion to employ a permanent CEO."
Mr. Crystal, who resigned from Macy Wednesday after news of his negotiations with Merry-Go-Round was disclosed in The Sun, has declined to comment.
His Macy resignation is effective July 31.
Merry-Go-Round has said it hopes to have a new chief executive officer installed by June 30 or soon afterward.
The 1,000-store boutique chain has been run since November by Thomas Shull, a corporate crisis consultant who has acted as temporary CEO and, recently, chairman.
Mr. Shull and his deputy, James Kenney, are likely to continue working for Merry-Go-Round at least through July and possibly through August, people close to the company said. Their contract expires June 30, but an extension has been under negotiation.
Also yesterday, Bankruptcy Judge E. Stephen Derby gave Merry-Go-Round preliminary approval to obtain a new, $90 million line of credit for the remainder of its time in bankruptcy proceedings. The new line, from Citicorp and GE Capital, replaces a $100 million line with CIT Group.
The new line requires sizable fees to set up -- more than $500,000 -- but will let Merry-Go-Round increase its borrowing against inventories, particularly in heavy buying seasons, the company said.
It also could lead to post-bankruptcy financing, which is a crucial part of Merry-Go-Round's reorganization plan.
But the new lenders have made no commitment to make post-bankruptcy loans, Mr. Kenney said in an interview.
Merry-Go-Round also reached an agreement with landlords yesterday about store closures. Mall operators want the retailer to make up its mind about how many more stores it will shut down.
Merry-Go-Round, which has already closed 400 poorly performing stores, wants its new CEO involved in the decisions.
People close to the company said it is likely to eliminate at least 50 more unprofitable stores.
Merry-Go-Round agreed yesterday to commit to keeping most of its Merry-Go-Round, Dejaiz, Chess King and Cignal stores open through the Christmas season.