Susie's Deals Files for Bankruptcy Protection
After more than 35 years in business, Susie’s Deals—a Southern California retail chain that sells bargain-basement merchandise at its stores in Utah, Nevada, Arizona and California—has voluntarily filed for Chapter 11 bankruptcy protection.
The filing on April 1 in the Riverside, Calif., branch of the U.S. Bankruptcy Court doesn’t list assets and deficits yet. But the company’s top 10 major unsecured creditors include One Step Up in New York, owed $283,236; Margin Maker Inc. in Orange, Calif., owed $254,028; G & S Off-Price in Vernon, Calif., owed $218,081; Almost Nothing in Los Angeles, owed $216,006; Pacific Apparel in Temecula, Calif., owed $197,421; Allura Imports in New York, owed $123,977; L.A. Grand Fashion in Los Angeles, owed $116,731; Topson Downs in Culver City, Calif., owed $110,354; American Dream in Los Angeles, owed $104,575; and SKKY Apparel in Los Angeles, owed $104,266.
Susie’s Deals, based in Ontario, Calif., is a chain of more than 70 stores founded in 1974 by Susan Hyman and her three brothers—Stephen, Howard and David. The company’s concept was to sell nothing for more than $5.99, relying on close-outs and overstock to provide some of the stores’ merchandise. But with merchandise growing more expensive, Susie’s Deals started to lift the $5.99 ceiling to cover costs.
Last summer, finances grew particularly tight. In June, store executives made a deal with Moshe Javizdad to receive a 45 percent share of the company in exchange for a $1 million cash infusion to pay old debts. Javizdad, who also is associated with Blue Galaxy Inc., a clothing wholesaler in Vernon, Calif., and Pacesetter Fabrics, also forgave $2.8 million in trade debt the Hymans owed him. But even that didn’t help. The Hymans said in court papers that the $4 million investment would have been better if it had been cash and a credit line instead of forgiven debt to be able to order more store merchandise.
“Without sufficient inventory, the debtor [Susie’s Deals] was not able to generate sales, upon which the business relies. The lack of sufficient cash flow and pressure from vendors caused the debtor to commence the instant reorganization proceedings,” Susie’s Deals said in its bankruptcy filing.
The company is trying to become more efficient by closing its underperforming stores and getting out of expensive leases. David Golubchik, one of the bankruptcy attorneys for the retailer, said the company has court permission to close 11 stores, located primarily in Arizona and California. It is also hoping to expand its Internet sales. —Deborah Belgum
