Sun Computers Inc., a Carson-based computer retail chain and one of the county's largest minority-owned enterprises, has defaulted on a loan and suspended operations, company officials and a major creditor said Thursday.
Sun's troubles are the latest sign of distress in computer retailing, which has been rocked by slow sales and pinched by falling machinery prices.
Sun, founded in 1980, has been one of the Southland's larger Apple computer dealers. Company officials were not available to comment on the current size of the chain or the number of employees, but Sun had at least 10 stores in Southern California as of March 30, when the company advertised a clearance sale at those locations.
A spokeswoman for Apple Computers said customers can get information on service for the computers they purchased at Sun by calling Apple headquarters in Cupertino, Calif.
Transamerica Commercial Finance, a Chicago-based division of San Francisco-based Transamerica Corp., said Thursday that it is one of a number of creditors taking foreclosure action against Sun Computers. Sun Computers agreed to allow Transamerica to take computer equipment from its inventory as loan collateral, said Richard Olsen, vice president for communications at Transamerica's San Francisco headquarters.
"Transamerica is foreclosing on our collateral, which is their inventory, in concert with other major creditors of Sun Computers because of default on payments that were due us," Olsen said.
Olsen would not comment on the value of its loan to Sun, but said it amounted to more than $1 million. He said Transamerica, a financial services giant, brought its default claims by filing a lawsuit in Los Angeles County earlier this month.
Transamerica has not dropped its suit, but it has reached an "interim agreement" with Sun that allows it to assume control of computer equipment at Sun stores.
David Sun, founder and chief executive of the retail chain, was not available for comment. However, a Sun Computers executive--who asked for anonymity--said the company was suspending business operations and liquidating its inventory. A Sun salesman, who also asked for anonymity, said he and other employees were told Wednesday not to report to work on Thursday.
Telephones at some Los Angeles-area Sun stores were not answered Thursday.
A recently published survey based on data from minority businesses placed Sun Computers third among Los Angeles County's largest minority-owned enterprises. The ranking, based on 1990 sales, indicated that Sun had $76 million in revenue--making it the highest-ranked Asian firm on the list.
Sun's troubles appeared to be sudden. David Sun--quoted in November in Computer Reseller News, an East Coast trade publication--said he was planning to expand his operation. He was quoted as saying he was aiming to have 25 store locations and that he was considering taking the company public.
Sun's problems are the latest evidence of difficulty in part of the computer retailing industry. Specialty computer dealers have traditionally lured customers with service and support capabilities that mail-order houses and mass merchandisers were hard-pressed to match. But as buyers have become more knowledgeable, they have become less willing to pay a premium for service.