Spa Sydell files for bankruptcy; adding 7th location in Roswell
The Atlanta Journal-Constitution
Spa Sydell, a purveyor of pampering in metro Atlanta for more than a quarter-century, has filed for Chapter 11 bankruptcy.
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The six-spa chain, founded by Sydell and Arthur Harris, will continue to operate, the company said, and it will sell and honor its popular gift certificates. It is adding a seventh location in Roswell.
In its 117-page bankruptcy petition, the company listed $4.3 million in debts and $5 million in assets. The filing shows a decline in gross income to $16.2 million in 2008 from $19.1 million in 2007. In 2009, year-to-date sales were $9.3 million through May.
Atlanta bankruptcy attorney Scott Riddle said spending on luxury items such as spa treatments has fallen in the recession.
“Due to the current economic times and for the continued future of Spa Sydell, it was necessary for us to take this proactive step,” CEO Richard Harris said.
Bankruptcy would allow the company to reorganize financially and to renegotiate its leases.
The chain features services such as massage, facials, manicures, microdermabrasion and reflexology. It has garnered attention locally over the years, in part, through the high profile of Sydell Harris.
The company started with a single location in Buckhead in 1982 and has changed names and expanded since. It has about 350 employees.
The bankruptcy filing lists $2.25 million in unsecured debt. Of that, $743,000 is owed on leases for the six retail locations. Hundreds of unsecured creditors are listed, mostly for trade debt, from radio station and newspaper advertising to business cards, shipping and catering.
The only secured creditor listed is BB&T, with a $1.8 million loan.
The company also owes the Georgia Department of Revenue more than $200,000.
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