THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Thursday, October 31, 1996 TAG: 9610310347
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: STAFF AND WIRE REPORT
LENGTH: 57 lines
When Best Products Co. Inc. goes out of business in four months about 5,500 people will lose their jobs, including 175 employees in South Hampton Roads.
The Richmond-based retailer, which has four local stores, said Tuesday it has decided to fold after prospective buyers decided against operating any part of the chain.
``I think a lot of people realized that this Chapter 11 was not going to have a happy ending,'' said Ross Richardson, a spokesman for the home furnishings and jewelry retailer. ``Still, a lot of people were saddened when they heard the news, and understandably so.''
Richard Riley, a 26-year veteran of Best who was senior vice president of sales and operations when he left in 1993, said most observers believed closing the chain was a possibility after Best decided last month to file for bankruptcy protection for a second time.
``While it was always a possibility, everyone was hoping that it would never come to this,'' said Riley, now president and chief operating officer at East Coast Oil Corp.
The investment groups seeking to buy Best - Jubilee Limited Partnership III, Bernstein Financial Group LLC, Alco Capital Group Inc. and The Nassi Group LLC - signed a new agreement to buy Best's assets for $410 million.
The deal must be approved by U.S. Bankruptcy Court in Richmond. A hearing is set for Nov. 19.
If approved, the investment groups will liquidate Best's assets, holding going-out-of-business sales at the remaining 88 stores and 11 jewelry-only stores until all the merchandise is gone, spokesman Richardson said.
Liquidation sales are under way at other stores, mostly in the western United States, that the chain previously had decided to close.
For local retailers, the liquidations at the three local Best outlets and one jewelry store could not come at a worst time - the holiday shopping season. That's when merchants make most of their sales.
``It has to be a concern for some of our competitors, coming toward the Christmas season,'' Richardson said.
Best has traditional showroom stores in Norfolk's Janaf commercial district, Chesapeake's Greenbrier section and in Virginia Beach near Pembroke Mall. It also has a jewelry store in Greenbrier Mall.
Once all of the liquidation sales are complete - probably in February - Best will cease to exist.
The $410 million paid by the investment groups and proceeds from sales at the remaining Best stores will go toward paying off the company's $535 million debt. The investment groups will get the store leases, remaining merchandise, fixtures and equipment.
Daniel H. Levy, who was hired as Best's chairman and chief executive officer in April to rescue the chain, said business realities made the continued operation of Best impractical.
``I don't like to throw in the towel . . . but it became clear that this action was the better alternative for the company and its creditors,'' Levy said. MEMO: Staff writer Stephanie Stoughton and The Associated Press
contributed to this report. by CNB