Best Products plans to close showrooms, jewelry stores Most area locations are unaffected by the action.

April 25, 1991|By Kevin Thomas | Kevin Thomas,Evening Sun Staff

Best Products Co. Inc., the financially strapped catalog specialty retailer, is closing 24 showrooms and 15 jewelry stores in another retrenchment of its nationwide operations.

A Best Jewelry store at The Gallery at Harborplace, which shut down yesterday, was the only Maryland store to close. The store, which has operated since late 1987, employed nine people.

The bulk of the closings are occurring in Florida, St. Louis, Kansas City, and Columbus, Ohio, company officials said. Two jewelry stores in the Washington area are among those being closed.

Company officials said the targeted jewelry stores would close immediately, while most of the showrooms would operate through June.

The move, which affects more than 1,500 full- and part-time employees, was announced yesterday. All of the terminated employees will be offered severance pay, the company said.

After the closings, Best said, it will be operating 171 showrooms and 18 jewelry stores.

The closings were made to improve the company's profitability and come four months after Best filed for protection from creditors under Chapter 11 of the Federal Bankruptcy Act.

"We looked at the profitability of all our showrooms and jewelry stores and decided to eliminate the stores that were not contributing," said Ross Richardson, a company spokesman. "This should position us to do well through the rest of the Chapter 11 process."

Still, the move surprised affected employees, most of whom learned of the closings yesterday in a conference call from the retailer's headquarters in Richmond, Va.

At the Best Jewelry store at The Gallery yesterday, employees were busy removing merchandise from displays for shipment elsewhere.

A man identifying himself as the sales manager said the store was still receiving shipments of jewelry as late as Tuesday.

"We had absolutely no idea this was going to happen," said the manager, who asked not to be identified. "The company filed for Chapter 11 and we were told then that everything was OK."

He said it will be difficult to find another job in retail trade, which has been sorely hurt by the recession. "How can we find jobs in the summertime when all of these kids are out of school and looking for summer jobs?" he asked.

Richardson said no other closings are planned by the company.

The company has had financial problems for several years. In 1987, Best closed 17 showrooms as part of a retrenchment. In 1988 the company was acquired in a $1.1 billion leveraged buyout led by Adler & Shaykin, a New York investment bank.

The company laid off 120 corporate staff employees a year ago and another 120 corporate workers in January 1989. Today, the company employs about 15,000.

Last year, sales at Best topped $1.8 billion, but the company owed an almost equal amount to its creditors. In December, the company stopped payment to those creditors and filed under Chapter 11 in January.

Best creditors had begun curtailing shipments to the company last September, forcing the company to endure a stark Christmas season with less than adequate supplies of merchandise.

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