Museum Co. Files Chapter 11, Closes Stores

NEW YORK, Feb. 27 (UPI) -- Museum Company, the major retailer of museum-related products in the United States and Canada, filed for Chapter 11 bankruptcy protection and is closing eight of its 99 stores by the end of the month, an attorney for the firm announced this week.

Alan B. Hyman, an attorney with the Proskauer Rose firm, said the store closings will include Museum Company's two flagship stores in New York -- one on Fifth Avenue and the other on 42nd Street. He said the firm no longer would have a presence in Manhattan after more than a decade in business.

"Many of the Museum Company's stores are in airports and around the New York area, and they were especially hard-hit by the events of Sept. 11," Hyman told United Press International. "They have retained a financial adviser and they are planning to raise equity."

The Museum Company downsizing is the latest in a series of shop closings due to the faltering economy. It follows a shutdown of the Warner Brothers Studio store, also on Fifth Avenue, which sold products relating to Warner Brothers films.

Hyman said Museum Company has formed a creditors' committee and is planning to restructure its operations to make it profitable again. Its creditors include one of its biggest suppliers of art products, the Museum of Modern Art in New York, which it currently owes $505,000.

Museum Company was founded in 1989 by a group of private investors as a way of taking the museum gift shop concept into shopping malls, airport terminals and downtown sites in cities across the nation. According to court papers, its parent company, Museum Corporation, has assets of $73.5 million and liabilities of $54.6 million.

Company shops carry certified reproductions of art work, especially sculpture, owned by various museums, as well as stained glass, paper products, glassware, jewelry, art books and a line of MOMA products ranging from note paper and calendars to tableware and umbrellas. It also sells products on the Internet inspired by the collections at the Smithsonian Institution in Washington.

Museum Company and the Smithsonian entered into an agreement two years ago to embark on a product development and licensing program by which the company would help Smithsonian Business Ventures, a marketing division of the institution, develop products for commercial sale. The company currently owes the Smithsonian a $500,000 payment on that agreement.

Museum Company's President and Chief Executive Officer, Howard Meitiner, said he was sorry the Manhattan stores had to be shut down in the interests of saving money.

"The most highly visible stores are also the least profitable," he said. "Flagship stores are great when you can afford them. But we are looking to return to New York City sometime in the future when times are better."

One of Museum Company's largest competitors is the Metropolitan Museum of Art, which has 23 shops, nine of them in Europe and Asia. In New York, it has shops at the museum, in Rockefeller Center and at Macy's department store. Although these shops are known to have lost revenue recently, there has been no announcement of shop closings.

The Metropolitan Museum shops reported sales of about $75 million last year. The Museum Company is privately held and does not release sales figures, but Meitiner said that its sales were "substantially higher" than the Met's, although he declined to give a specific figure.