Liquor Barn to Close 19 Stores in Southland : Retailing: An executive says that expensive leases and the recession forced the chain to shut down the profitable outlets and that 200 will be laid off.

Liquor Barn, the California-based discount liquor chain, said Thursday that it was closing 19 of its stores, all in Southern California, and laying off 200 employees.

The stores are profitable, Executive Vice President Lewis Silverberg said, but two things forced the move: First, lean economic times made it impossible for the chain to refinance some of its debt, and second, the leases on the buildings were worth more than the stores themselves.

“When we acquired the chain,” Silverberg said, “we acquired it without the excise tax increase (on alcoholic beverages) and without the recession, and that combined to make us unable to get the refinancing done.” He said the credit market is tighter than the company anticipated it would be.

A holding company, La Jolla-based Intermark, along with Silverberg, Liquor Barn President Harvey Rosen and other partners, bought the chain in 1989 out of bankruptcy court after the former owners, Majestic Wine Warehouses of England, filed for court protection in 1988.

Stores to be closed include three in Los Angeles, three in the Palm Springs-Riverside area, two in Huntington Beach and one each in Canoga Park, Costa Mesa, Glendale, Granada Hills, Irvine, Mission Viejo, Orange, Pasadena, Thousand Oaks, Escondido and Torrance. Silverberg said all the stores were profitable--”some were among the most profitable in the chain.”

Th stores being closed operated out of leased buildings averaging 20,000 square feet each. “All of the leases have value, some in the millions of dollars,” Silverberg said.

Remaining in the chain will be 44 stores, six in San Diego County--the original test market for the concept--and 38 stores in Northern California.

“This is a very positive move for the chain,” said Silverberg. “We will have 44 strong stores that will not have operational or credit problems.”

The Liquor Barn concept started out in the early 1980s as a test by Safeway. A vice president with Safeway, Steve Boone, converted Safeway’s La Mesa store into what then was called ALPS (always low price store). When the concept seemed to work, Safeway converted or opened 104 stores called Liquor Barn.