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O.C.'s Builder's Emporium Will Close Its Stores

August 25, 1993|DAVID W. MYERS | TIMES STAFF WRITER

IRVINE — Builders Emporium, which started as a modest hardware store in the San Fernando Valley and grew to become the largest home improvement chain in Southern California, said Tuesday that it will close all of its 82 California retail outlets and lay off nearly all of its 3,800 Southland workers by the end of October.

The Irvine-based chain, whose sales have been battered by the Southland's prolonged housing slump and fast-growing competition from much larger stores, was put up for sale in November by the New York-based Collins & Aikman Group, formerly known as Wickes Cos. But no buyer emerged, and officials at Collins & Aikman--wary of pumping millions of dollars more into an operation that hasn't turned a profit in more than two years--decided to pull the plug Tuesday.

"It's a sad day for our employees and a sad day for all of our loyal customers," said H. Michael Hecht, who was named president of Builders Emporium last fall and charged with stemming the flow of the company's red ink.

In addition to its 82 Southland stores, Hecht said, the company also will begin closing its other 15 stores in Nevada, Arizona, New Mexico and Texas. The 500 employees who work in those stores will raise the number of layoffs to 4,300.

Hecht said stores will remain open as workers prepare for a massive "going out of business" sale, which will begin in about a week. Most of their jobs will be ensured for at least two months, Hecht said, then layoffs will begin as merchandise dwindles.

Although most cashiers and other store employees will get no severance pay, Hecht said the company will provide them with resume writing workshops and other help in seeking jobs. Most of the 180 staffers in its Irvine headquarters are entitled to a severance package that will include cash payments and other benefits, Hecht said.

The closure of Builders Emporium comes almost three years after National Lumber & Supply Inc.--another onetime giant in Southern California's multibillion-dollar home improvement industry--began liquidating in the wake of its 1990 bankruptcy filing.

Builders Emporium was entangled in a bankruptcy of its own in 1982, when its parent at the time, Wickes, filed for Chapter 11 protection. Wickes returned to profitability in 1985, thanks to a turnaround effort led by its chairman, Sanford (Sandy) Sigoloff.

Sigoloff organized a management buyout effort of the Wickes empire in 1988, but was outbid by two New York investment firms that renamed Wickes the Collins & Aikman Group.

Builders prospered in the second half of the 1980s, combining the personalized service usually reserved for smaller hardware stores with the lower prices that only a large chain could offer.

But Builders' fortunes began to fade when California's economy slipped into recession and the Southland's housing market crashed about 1990.

Its woes were compounded by stiff competition from fast-growing chains such as Home Depot and Home Base--high-volume warehouse stores that are two or three times larger--and discount operators such as Wal-Mart and Target.

Although some Builders Emporium store employees said late Tuesday that they had learned of the closure earlier in the day through a speech Hecht made over the chain's in-store television system, the announcement caught others by surprise.

Caspar Randazzo, who has worked at the chain's Fountain Valley store for more than a decade, said his co-workers had been speculating about the company's future for several weeks but said he knew nothing of Hecht's televised speech earlier in the day.

"After so many years, you don't feel good about it," Randazzo said after hearing the news.

Some of his co-workers said they are headed back to school soon and will not suffer as much as the others that have worked in the store for years. Asked whether the closure will hurt financially, Hector Marquez said, "Maybe not to me, but to some of the old timers."

A worker at the Garden Grove store said that losing the store will be a blow to the community. The city has few, if any, other hardware stores, said the worker, who declined to be identified.

"The customer count is down, but it's that way everywhere," he lamented. He said workers had hoped that the chain would prune losing stores, but keep the rest of the chain viable.

Times staff writer Chris Woodyard contributed to this report.

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