ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Tuesday, October 8, 1996 TAG: 9610080058
SECTION: BUSINESS PAGE: B-8 EDITION: METRO
DATELINE: RICHMOND
SOURCE: Associated Press
Discount retailer Best Products Co. Inc., under bankruptcy protection for the second time in five years, said Monday it will close nearly half of its 169 catalog showroom stores and three of its four distribution centers.
About 2,000 of the chain's full-time employees and 2,500 part-time employees will lose their jobs, leaving Best with about 5,500 workers, 3,300 of them part-time, the Richmond-based company said.
Beset by declining sales and earnings and deteriorating support from suppliers, Best filed for Chapter 11 protection from creditors two weeks ago. The company listed assets of $710 million and liabilities of $533.5 million.
The company said it will close 81 stores in 19 states, with a significant number of them in Texas, Colorado, Oregon, California and Washington state.
The Best store on Hershberger Road in Roanoke will remain open.
Best Products Chairman and Chief Executive Officer Daniel H. Levy said he regretted that so many stores and employees will be affected.
``However, we have carefully studied our business, and we do not believe these locations will contribute significantly to the company's future profitability,'' he said.
Best Products lost $66 million in the first half of this year as overall sales fell 8 percent.
Kenneth M. Gassman Jr., a retail analyst at Davenport & Co., said he believes Best Products will be out of business by the end of 1997.
``I cannot point to a single retailer which has survived two bouts of Chapter 11 bankruptcy,'' Gassman said.
Cody McGarraugh, a retail analyst for Scott & Stringfellow in Richmond, agreed. ``I think it's a sign of their desperation,'' he said. ``It makes me wonder what will become of them.''
The company said it will begin ``going-out-of-business'' sales at the 81 stores this month.
The distribution centers being closed include two contract operations in the Denver, Colo., and Seattle, Wash., markets and a company-owned operation in Las Vegas, Nev.
Best Products spokesman Ross Richardson dismissed gloomy predictions for the 40-year-old company.
``I would say that this is actually a positive sign because it is a step toward retrenching the company,'' Richardson said. But he added, ``It's certainly painful for us. It's harsh medicine.''
At the Best Products store in Springfield, the only one in Virginia marked for closing, there were no signs announcing the closing or the impending going-out-of-business sales.
Maria Apperson, who manages the store's jewelry section, said most employees found out Monday.
``Employees in this store are being taken care of,'' she said. ``I can tell you that.''
Best Products, which specializes in jewelry and home products, operates in 23 states. The closings will reduce the chain to 88 stores, down from a high of 195 stores in the mid-1980s.
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