After dozens of prospective buyers kicked the tires at bankrupt ABC Carpet & Home, the iconic New York City retailer is being sold to a Persian rug dealer, The Post has learned.
A Friday auction was canceled because the little-known rug merchant — who was also the “stalking horse” bidder in a court-administered auction — submitted the only offer to acquire the family-owned business, according to court documents.
Paulette Cole, whose family has operated the 125-year-old store — long known for its designer furniture, pricey carpets and expensive knickknacks — has a minority stake in the new owner, an investment fund called 888 Capital Partners LLP, court papers say.
The fund is, in turn, controlled by Regal Investments LLC, according to court filings. Sources tell The Post that the firms are run by Iranian rug merchants.
Indeed, it’s likely now that ABC Carpet, which has a flagship at 888 Broadway and an outlet store in Brooklyn, returns to its roots selling mostly rugs.
“I believe they’ll move away from the fancy jewelry and concessions on the first floor and focus on their high-end rug business,” bankruptcy attorney Ken Rosen told The Post.
“These Persian rug merchants are primarily interested in the rug business, and that’s most likely what attracted them to the business in the first place instead of all the other stuff ABC sells like one-of-a-kind stemware,” Rosen added.
The carpet-seller group became a lender to the flailing retailer in early August, agreeing to advance ABC $5.7 million in cash to keep the lights on. The terms of its bid stipulate that it would forgive the bankruptcy loan and some $8.7 million of pre-bankruptcy debt in exchange for ownership of the business should it have the winning bid, according to court papers.
Earlier this month, the retailer’s bankruptcy counsel, Oscar Pinkas of Greenberg Traurig, said at a court hearing that there had been “considerable” interest in acquiring the Big Apple business and that the investment advisor, B. Riley had been in touch with “100 interested parties.”
ABC Carpet had lagged other retailers for years in setting up a robust online business. But when the pandemic hit, it was especially vulnerable because its merchandise lends itself to in-store shopping. It has relied heavily on wealthy clientele and tourists who had abandoned the city last year.
The Post had previously reported that private equity firm, Windsong Global and Burch Creative Capital — led by Chris Burch, who co-founded Tory Burch LLC — were interested buyers along with the rug merchants.
About a month ago, ABC Carpet began liquidating its pricey inventory, which is going for as much as 50 percent off, including its rugs, according to its website. But the deepest discounts have yet to begun.
“As we transition, we are saying goodbye to some of our beloved collections,” it’s website says.
A $2,280 “Diamond Orchid” ring is now selling for $1,499 while a vintage 10 X 15 foot Turkish rug that previously cost $15,000 is now listed at $10,850 and vintage French chandelier has been reduced to $1,760 from $2,200.
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