Crown Stores to Close Soon
Crown Books Corp., which filed for bankruptcy about a month ago, said Tuesday that it will soon begin closing dozens of its stores, including 16 in Los Angeles and Orange counties.
The stores will be shuttered as soon as Crown gains permission from the bankruptcy judge, said Steve Pate, vice president of operations for the Landover, Md.-based company.
“We will close the doors and then return the merchandise to the vendors,” he said.
Crown Books, which filed for bankruptcy reorganization July 14, announced earlier this month it would shut down 79 of its 174 stores and halt all operations in Philadelphia, Seattle and Texas. The company said at the time that it would retain a strong presence in some areas, including Los Angeles, San Diego and San Francisco.
Crown Books operates more than 50 stores in Southern California.
The 11 stores being closed in Los Angeles County are in Burbank, Encino, Glendale, Lakewood, Malibu, Northridge, Pasadena, Santa Clarita, Studio City, Thousand Oaks and West Hills. Orange County will lose stores in Anaheim Hills, Fullerton, Huntington Beach, Irvine and Tustin.
The company also plans to shut down a bookstore in Escondido and several in San Francisco. In all, 1,250 workers will lose jobs, including employees in the corporate office.
Most of the targeted stores will close simultaneously, Pate said.
“We are pruning back to the profitable base of stores,” Pate said. “We expect to stabilize, get through the rest of the year. And then it is our plan to go back into the growth mode, to open stores, next year.”
Crown Books, which in recent years has suffered from slow sales and dwindling cash, was formed 21 years ago as a discount bookstore. For most of its history, the company’s discount strategy was successful, Pate said.
But as larger bookstores began opening--sometimes across the street from Crown Books--the company began to lose its focus, he said.
Much of the company’s competition in recent years has come from Barnes & Noble Inc. and Borders Group Inc., which thrived by building bigger stores and selling books on the Internet. Crown Books does not sell via the Internet, Pate said, and has no immediate plans to do so.
Crown Books responded to the new competition by opening Super Crown stores, which were larger than their original stores but still smaller than the major competitors, Pate said.
“There was a strategic decision to try to do a smaller version of what they were doing,” he said. “It failed.”
Crown Books is part of Dart Group, which was recently acquired by Richfood Holdings Inc. Last year, Crown lost nearly $50 million on sales of $300 million, Pate said.
The company’s stock, which had skidded to less than $1 a share shortly before the bankruptcy, closed Tuesday at $1.03, down 9 cents, in Nasdaq trading.
