Phil & Jim’s Closes Remaining Stores : Bankruptcy: Electronics and appliance chain lays off most of its 70 employees and plans to liquidate its inventory.
Phil & Jim’s, the financially troubled electronics and appliance chain, closed its five remaining stores on Friday and laid off most of its 70 employees.
The company plans to sell its remaining merchandise during a liquidation sale, but Phil & Jim’s President Phil Delgado Jr. would not say whether the events spell the end for the 40-year-old chain or whether there are plans to reopen one or more of the stores.
The chain, which entered Chapter 11 bankruptcy proceedings in January, previously closed five stores outside Orange County and laid off 180 employees. On Friday, the company closed its stores in Anaheim, Anaheim Hills, Lake Forest, Huntington Beach and Cerritos and laid off all but a handful of its remaining employees.
The firm’s bankruptcy filing listed $16 million in debt and about $7 million in assets.
More than $2 million of that debt involves extended warranties purchased by more than 100,000 customers who now have lost that protection.
The warranties were abrogated in bankruptcy court, Delgado said, and customers have been advised to contact manufacturers about warranty questions.
Huntington Beach resident Pat McCaffrey said Friday that she’s facing a $305 repair bill for a camcorder that broke just months after she purchased it from Phil & Jim’s. McCaffrey said she also paid more than $100 for extended warranties--now apparently worthless--on a washing machine and a television.
As recently as Wednesday, McCaffrey said, Delgado had assured her that Phil & Jim’s would fix the broken camcorder. “Then I find out they’re closing their stores,” McCaffrey said. “I went and got my camcorder (Friday) because I was afraid if I left it there I wouldn’t get it back.”
Despite Friday’s store closings and the as-yet unscheduled retail stock liquidation sale, Delgado said the 40-year-old company is still attempting to restructure its debt.
“We’re still in a Chapter 11 (restructuring) and there’s no plan to convert to a Chapter 7 liquidation” of the company, said Delgado, adding that “there is something that we’re working on” to restructure the company’s finances and debts.’
Delgado linked the privately held chain’s financial woes to increased competition from large chains like Circuit City. But the company also has been hurt by a long-running feud involving its founding partners.
A Superior Court judge in December ordered the estate of Jim Ousterhout,the firm’s co-founder, to pay Phil & Jim’s an estimated $1 million to settle the feud. “We won the lawsuit but haven’t been able to collect yet,” Delgado said.
Delgado also blamed “a huge inventory problem left by a previous (manager) that was not resolved.”
Phil & Jim’s bankruptcy filing listed secured debt of $8.7 million, owed mainly to Whirlpool, General Electric Credit Corp. and Maytag Corp. It owes $4.8 million to 338 other manufacturers and vendors.
