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Howard & Phil's Stores Hang Up Their Hats

Retail: Facing bankruptcy, western wear outfitters close down. McKeon family hires firm to liquidate assets and pay off 300 to 400 creditors.

May 15, 1999|MIGUEL BUSTILLO and STEPHANIE STASSEL | TIMES STAFF WRITERS

CANYON COUNTRY — Howard & Phil's Western Wear, a once-popular chain of cowboy clothing stores owned by the family of U.S. Rep. Howard P. "Buck" McKeon, headed off into the sunset for good this week, hiring a firm to liquidate its remaining assets and stave off creditors.

In order to avoid a second bankruptcy proceeding, the McKeon family heeded the advice of its attorneys this week to close its remaining nine stores and sell its inventory.

Founded by McKeon's parents in 1962, Howard & Phil's rode the country-western craze of the 1980s into a successful clothing mini-empire that stretched from Southern California to Nevada and Utah.

At its peak, the chain had 52 stores and more than 500 employees selling the finest in snakeskin boots and 10-gallon hats. On Wednesday, its last stores were shuttered, as the McKeon family decided the business, which had been fighting financial problems for years, could no longer stay afloat.

"The boot industry made too good of a product," joked Joseph McKeon, who had served as president during the chain's final years. "After the battles that we have been through, it's time to look for another line of work. This was an experience I wouldn't wish on anyone."

In 1996, Howard & Phil Enterprises Inc. filed for Chapter 11 bankruptcy court protection after a landlord at six malls where its shops were located sued for breach of contract and won.

Family members at the time attributed the chain's troubles--it had assets of $10.2 million and debts of $16.7 million--to the sagging popularity of country line dancing and a decline in Japanese tourism, among other things. Though he was perhaps the chain's best advertisement, sporting ostrich hide boots in the power corridors of Washington, Buck McKeon had not worked in the family business for years, other relatives note.

Howard & Phil's eventually was forced into a plan to pay off creditors that would have kept 33 stores open, said Joseph McKeon, Buck McKeon's brother. But the bankruptcy weakened the business' credit with suppliers and it could no longer stock its operation, he said.

"The plan was stillborn as far as we were concerned," he said. "When the credit support failed to come through, we had to close more stores, and we went into a downward spiral."

The business is now hoping to pay off as many of its 300 to 400 creditors as possible. The business' debts still far outnumber assets by several million dollars, Joseph McKeon said.

"We do not intend to open the stores," said Geoff Berman of the liquidation firm, Development Specialists Inc. "It is our intention to sell the assets for whatever we can get."

Richard Giss, a retail trade expert with Deloitte & Touche, said Howard & Phil's appeared to be the victim of a down cycle in the western wear market.

"It's easy to sell western wear when people are viewing themselves as cowboys and going to dance clubs," Giss said. "It's hard to have the same numbers when those dance clubs fade in popularity."

Joseph McKeon disputed that assertion, however, saying that sales at the stores had continued to be strong.

Whatever the case, the loss of Howard & Phil's did not signal good things to come for western wear retailers, said Rick Stanoff, owner of the Country General Store on Van Nuys Boulevard for the past 45 years.

"Having a chain like them around has a big impact on the industry," Stanoff said, adding that he had just learned about the closures Friday. "People are going to seek us out instead, but it's not good."

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