Ailing Best Products to Shutter 81 Stores

Troubled retail chain Best Products said Monday that it will close 81 stores nationwide, including all 16 of its Southern California locations.

The Richmond, Va.-based company, which recently filed for bankruptcy protection, will lay off 4,500 full- and part-time employees as it attempts to cut costs by retreating to its strongest markets.

Best Products, which now has about 10,000 employees at its 169 stores nationwide, will also conduct a store-closing sale that will begin in early November and run through the upcoming holiday shopping season.

The discount chain that sells furniture, household goods and other merchandise has struggled to turn a profit in recent years. Industry analysts said its Sept. 25 bankruptcy filing wasn’t unexpected because the chain had never fully recovered from a heavy debt load that forced the chain into a previous bankruptcy stay during the early 1990s.

Costa Mesa resident Doug Steiner, who was shopping at Best Products’ Santa Ana store Monday, said he wasn’t surprised to hear that the chain had financial difficulties. “There’s usually very few people shopping at this store, and they seem to do very little business outside of the Christmas season,” Steiner said.

Best Products has also been struggling to revamp a catalog sales format that many customers found to be time-consuming and confusing. Rather than simply taking merchandise from store shelves, customers must review catalogs, place orders with store clerks and pick up their goods in another part of the store.

“I don’t think your grandmother would like the way Best operates,” said Peter A. Chapman, president of Bankruptcy Creditors’ Service Inc., a Princeton, N.J.-based research firm. “People like to feel and touch the merchandise and to talk to the sales clerk about what they’re going to buy.”

Best Products has also been hammered by stronger retail chains such as Best Buy and Target, said Tom Thompson, a retail industry analyst with Richmond, Va.-based Wheat First Butcher Singer. “I think customers have lost any idea of what Best Products stood for,” he said. “Their merchandise selection was too diffused and unfocused.”

Best Products’ decision to hold store-closing sales just as the holiday shopping season begins could send shivers through the retail world, which struggled last year to salvage profit margins during a wave of going-out-of-business sales.

“This announcement will obviously add pricing pressure, at least for the short-term, on competitors,” said Nate Franke, a retail industry accountant with Deloitte & Touche in Costa Mesa. “And you hate to think of jobs being lost as we move into the holiday season.”

Most of the 81 stores to be closed by the end of the year are in California, Texas, Colorado, Oregon and Washington.

The Southern California stores that will close include four in Los Angeles County, four in Orange County and two in Ventura County. The chain will retain two stores in Sacramento as well as stores in Bakersfield, Modesto and Fresno.