Leather-goods retailer Tuerkes files to reorganize

January 21, 1993|By Kim Clark | Kim Clark,Staff Writer

Tuerkes-Beckers Inc., the Savage-based owner of 30 leather goods stores in the mid-Atlantic, has filed for bankruptcy court protection, company officials said yesterday.

Company President William A. Tuerkes IV, great-grandson of the company's founder, said Tuerkes would close at least four stores, but hopes to reorganize under Chapter 11 of the U.S. Bankruptcy Code and remain in business.

"We've lived through recessions and depressions. . . . We certainly plan on pulling through this," Mr. Tuerkes said of the 93-year-old company.

Mark Ridgely, the company's chief financial officer, blamed the financial woes on a combination of cutbacks in consumers' discretionary spending -- since Tuerkes sells mostly luxury items such as briefcases, pocketbooks and shaving kits -- and banks' conservatism.

The company had been losing money for two years, he said. As a result, First National Bank of Maryland declined to renew its line of credit last month, Mr. Ridgely said.

First National spokesman William Frank said the bank would not comment on customers' transactions.

The Tuerkes family and other managers tried to persuade other area banks to provide financing, but failed, Mr. Ridgely said.

Then, when the retailer's managers realized the holiday selling season wouldn't bail them out, they decided to seek protection from creditors, he said.

Sales during the 1992 Christmas season were down slightly from the year before, probably because the company's cash crunch prevented it from carrying as wide a selection as it would have liked, he said. Also, concerns about the economy likely depressed purchases, he said.

Mr. Tuerkes said the company planned to close its stores in the Security Square Mall and Eastpoint Mall soon. He said the company would also attempt to renegotiate leases or rid itself of money-losing operations, he said. Some of its stores, such as its operations at Towson Town Center and White Marsh Mall, are profitable.

Although some workers at some stores have already been laid off, Mr.Ridgely said he didn't expect to let go a large numbers of employees. The company has 260 workers, he said.

He said the firm would try to reduce layoffs by transferring workers.

In its filing in federal bankruptcy court, the company listed assets of $8.4 million and liabilities of $5.7 million, all but about $1 million of which was owed to suppliers.

One local supplier, Clemco, a Baltimore maker of nylon garment bags, said it hadn't realized Tuerkes was having financial difficulties.

"They are a very conservative, very honorable business," said Clemco spokesman Jim Deutschendorf.

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