Z Gallerie files for bankruptcy protection

April 13 (Reuters) - Home merchandise retailer Z Gallerie Inc has filed for Chapter 11 protection in a California bankruptcy court last Friday, saying it was hurt by a "severe" drop in sales, court documents showed.

The company, which sells furniture and other home and office merchandise, listed assets and debt in the range of $10 million to $50 million in its filing in the U.S. bankruptcy court for the Central District of California.

In court papers, Z Gallerie said it was looking to reorganize its business around its strongest performing stores and eliminate burdensome locations and assets unnecessary to the reorganization.

U.S. furnishings companies have been under severe pressure as a deepening recession and declining home values pressure consumer spending.

In its filing, Z Gallerie said its January 2009 sales fell 19.4 percent when compared with a year earlier.

The company is currently operating 57 retail stores across 18 states in America, it said.

The case is In re: Z Gallerie Inc, U.S. Bankruptcy Court, Central District of California, No.09-18400. (Reporting by Santosh Nadgir in Bangalore; Editing by Anil D'Silva) ((santosh.nadgir@thomsonreuters.com; within U.S +1 646 223 8780; Outside U.S +91 080 4135 5800; Reuters messaging: santosh.nadgir.reuters.com@reuters.net))