Albert Gunther & Co., one of the Baltimore area's largest and best-known hardware businesses, has filed for reorganization under Chapter 11 of the U.S. bankruptcy code.
The filing, which was made last week, comes on top of an out-of-court restructuring that took place last year in which the Timonium-based hardware business received a capital infusion from a group of investors for working capital and to help make debt payments to Mercantile Bank and suppliers.
Paul Nussbaum, attorney for Gunther hardware, estimated yesterday that the business owes Mercantile more than $4.2 million and owes suppliers roughly $2.5 million.
"Because of the current conditions in the market, they are just suffering," Mr. Nussbaum said.
Gunther, which was a fixture at Maryland Avenue and Biddle Streetfor more than 80 years before it moved to Timonium three years ago, will phase down -- and possibly out of -- its retail and industrial mill supply operations, said Ken Dodson, chief operating officer.
He said those two divisions represent about 30 percent of Gunther's business -- or $4 million in revenues -- but are not seen as profitable ventures.
Gunther will convert its operations to a commercial and residential door, frame and hardware company selling to contractors, builders, developers and other members of the building trade.
"The future of this business will be geared toward going out and visiting our customers. Our location will be less important," Mr. Dodson said.
Ironically, Gunther attributes part of its poor performance in recent years to its move from the city to its 67,000-square-foot location on Deereco Road, which was done during a time when many locally owned hardware stores were moving out of the city.
"The move to Timonium from downtown Baltimore did hurt the company's operations and sales as far as walk-in traffic was concerned," Mr. Dodson said.
Gunther will most likely have to lay off some of its 80 employees, Mr. Dodson said, as part of cost-cutting measures to restore profitability.
Founded in 1907 by Frank Albert Gunther Sr., Gunther hardware and its founding family have become a fixture in the Baltimore community. It is highly regarded by the trade and civic groups.
Mr. Dodson said his foremost competitor, whom he declined to name, called him recently to wish the company the best during its reorganization efforts. "That is very encouraging," he said.