SENECA — News reports emanating out of Knoxville, Tenn., the home base of the Goody’s clothing store chain, indicate the firm will begin “going out of business sales” Friday.

Retailers at the Seneca location confirmed that the sales of gift cards and layaway services have been halted. The Web site of the Knoxville Sentinel confirmed liquidation procedures Tuesday afternoon.

“Bob Carbonell, chief credit officer for retail credit rating service Bernard Sands, told the Sentinel that the Knoxville-based retailer is liquidating,” the newspaper reported.

Management at the Seneca Goody’s store was unaware of the latest news.

“We had no idea about any of it,” said Kayla Griffin, day manager. “Even when they filed for bankruptcy, we heard about it well after the fact.”

Goody’s filed for chapter 11 bankruptcy protection in early June and compiled a press release in October stating they had successfully emerged with stronger business plans and an overall improved product.

Paul White, Goody’s Chief Executive Officer, stated in the October release, “We believe we have significantly strengthened both our business and capital structure and this will allow Goody’s to continue to build on its 55-year heritage. Our Plan has enabled us to eliminate considerable costs from our business, and we now have a profitable store base that is more efficient and productive.”

However, it would appear that holiday sales were not substantial enough to support the reorganization plan.

According to Reuters and the Sentinel, Cathy Hershcopf, a bankruptcy partner at law firm Cooley Godward Kronish LLP, Goody’s is “in the processes of obtaining bids to liquidate substantially all collateral and inventory. The retail environment is very difficult, and they did not have sufficient capital to weather the bad times.”

Goody’s was founded in 1953 by the Goodfriend family. Morty Goodfriend, store manager in Knoxville, declined to comment on news reports.

“At this point, we’ve been told to direct all inquires to our public relations office,” he said.

Joanna Gager, PR representative for Goody’s, was unavailable all day and did not return phone calls.

Goody’s became a privately owned company in January 2006. Its annual revenue is more than $800 million, and it employs 9,800 workers in 287 stores across the South and Southeast.