Parent of Fallas retail chain files for bankruptcy, will close dozens of stores

The parent company of Fallas Paredes filed for Chapter 11 bankruptcy protection. Other store chains owned by the company include Anna's Linens and Fallas.
(Francine Orr / Los Angeles Times)

The Gardena-based parent company of the retail chains Fallas and Anna’s Linens said Monday it filed for bankruptcy reorganization and plans to close 74 of its 344 stores.

National Stores Inc., a family-owned firm, operates in 22 states and Puerto Rico. Its other chains include Fallas Paredes, Fallas Discount Stores and Factory 2-U.

The company’s Chapter 11 petition was filed in U.S. Bankruptcy Court in Delaware, and the chain “is committed to improving its financial health and returning to profitability,” Michael Fallas, National Stores’ chief executive, said in a statement.


The stores closing include 12 in California — eight Fallas stores and four Anna’s Linens outlets. The Fallas stores being shuttered include those in Hollywood, Norwalk, Northridge, Burbank and Santa Ana.

Sales for the stores set to close will start Thursday, the company said. National Stores currently operates 121 stores in California. It wasn’t immediately known how many jobs were affected; National Stores employs 9,800 nationwide.

Fallas and National Stores’ other chains carry value-priced merchandise, including apparel, bedding, household supplies, décor items and other general merchandise. The company does not operate an e-commerce website.

National Stores said the bankruptcy filing was due to certain underperforming stores and severe weather in various regions that hurt sales.

In addition, the company suffered a data breach in the second half of last year in which some customers’ payment-card information was exposed at dozens of stores, and as a result “access to operating funds diminished” for the company, National Stores said.

Under Chapter 11, a company continues to operate but its pre-Chapter 11 debts are frozen as the firm develops a reorganization plan acceptable to its creditors. National Stores’ filing listed both its assets and liabilities as between $100 million and $500 million.


In the meantime, National Stores said it “has ample liquidity to fund operations,” including a commitment for up to $108 million in debtor-in-possession financing from its existing lenders.

Twitter: @PeltzLATimes


3:05 p.m.: This article was updated with National Stores’ total employment.

This article was originally published at 12:20 p.m.