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Builders Discount Down to 1 Store

January 26, 1993|JAMES F. PELTZ | TIMES STAFF WRITER

Builders Discount Inc., a North Hollywood-based operator of building-supplies stores that once had four outlets, is now running just one store as it continues reorganizing in federal Bankruptcy Court.

Even before it filed under Chapter 11 of the bankruptcy laws in late October, Builders Discount had closed its stores in Chatsworth and Simi Valley, said Paul A. Beck, a lawyer representing the company.

"Those locations will not be reopened and the properties are going to be returned to the landlords," he said. Builders Discount had leased all of the storefronts and owned no real estate itself, he added.

Since the filing, Builders Discount also has sold the inventory of its North Hollywood store for an undisclosed sum to another company, Builders Depot, which is now operating the business, Beck said.

Builders Discount's only remaining outlet is in Los Angeles, which is "a very viable store," Beck said. The company also plans to move its headquarters to that location in a month or two, he added.

"We expect to consummate a successful reorganization in the Bankruptcy Court," Beck said.

Under Chapter 11, a company continues operating but is shielded from creditors' lawsuits while it works out a reorganization plan. Beck said Builders Discount's biggest secured creditor is Bank Leumi, an Israeli-based bank that was owed about $7.5 million.

In 1991, the company's sales were about $53 million. Although Builders Discount executives did not return calls to elaborate on more recent figures, the company apparently was the victim of the weak economy and intense competition from the likes of giants Home Depot and Price Club. When it filed for bankruptcy, Builders Discount listed total debts of $14.9 million and total assets of $12.7 million.

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