Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, May 12, 1993 TAG: 9305120034
SECTION: BUSINESS PAGE: B6 EDITION: METRO
SOURCE: SANDRA BROWN KELLY STAFF WRITER
DATELINE: LENGTH: Medium
The discount merchant, operating under protection of bankruptcy law, said the closings are to raise cash to pay its bills.
The only other Virginia store affected is at Chandlers Mountain Station in Lynchburg. It and the Roanoke store each employ about 40 people, a spokesman said.
Brendle's stores at Tanglewood Mall in Roanoke County and at Market Place in Christiansburg will remain open, the company said.
Employees learned of the closings Tuesday.
Brendle's Stores Inc. filed in November for reorganization under Chapter 11 of the bankruptcy code. It closed eight stores before November and said at the time that more downsizing would come after the Christmas holidays.
The closings announced Tuesday will eliminate about 520 jobs and leave the chain with 30 outlets. Also closing are stores in Wilkesboro, Gastonia, Rocky Mount, Statesville and Charlotte, N.C.; Hilton Head, Charleston, Greenville and Aiken, S.C.; and Augusta, Ga.
The company also will cut about 65 jobs at its Elkin, N.C., headquarters, which is more than one-third of the staff there.
Bill Grady, senior vice president of marketing and advertising, said the company ranked its stores on rent, sales, overhead costs and return on sales, and cut the lowest performers.
He said stores being eliminated include both those in malls and stand-alone facilities such as the Valley View store, opened in July 1990.
Liquidation of inventories will give the company cash it needs to pay part of its pre-bankruptcy debt, Grady said.
He said the closings were required by the company's creditors, but the move also lets Brendle's concentrate on stores with the greatest potential.
Preliminary sales figures for the chain's first quarter were $34.8 million. Same-store sales - a measure of stores operating for at least a year - were $34.2 million, compared with $37.0 million last year.
The loss of the Valley View Brendle's will not affect a Montgomery Ward automotive shop that opened beside it in August 1991, said the mall's leasing agent, Bill Moseley of Faison Associates Inc. in Charlotte, N.C.
The two stores made up Valley View Promenade, which was the beginning of a strip center alongside the mall. The property is owned by Hersch Associates, a partnership controlled by Faison, developer of Valley View.
Moseley also said Brendle's experience was not necessarily that of other retailers at Valley View. He said sales last year for shops inside the mall were up an average of 10 percent.
Moseley said the 40,000-square-foot Brendle's space is suitable for another catalog showroom merchant or a large sporting goods retailer. He said he had no particular tenant in mind, but re-leasing efforts are under way.
Best Products Co. Inc. has leased former Brendle's locations in Faison shopping centers in Colonial Heights and Newport News and will open stores there in July.
A spokesman for Best in Richmond said the company knows about the pending Valley View vacancy and is reviewing "many locations." Best's only Roanoke Valley store is within sight of Valley View Mall.
Best filed for protection under Chapter 11 in January 1991 to restructure debt left from a 1988 leveraged buyout. In February, Best said it would consolidate its office staff and close 66,000 of its 300,000 square feet of office space north of Richmond.
The company has cut its headquarters staff from 1,100 in 1988 to about 700. It has cut the number of stores it operates from 227 to 168.
by CNB