Do-it-yourself home-improvement retailer Channel Home Centers Inc. has been approached by potential buyers interested in purchasing the 11 Maryland stores it is planning to sell or close as part of a bankruptcy reorganization plan, Channel President Joseph Nusim said yesterday.
According to Mr. Nusim, "several" potential buyers, including rival hardware chains, expressed interest in Channel's Maryland outlets -- seven of which are in the greater Baltimore area.
"We are in the process of attempting to sell all those stores as group" he said, adding it was too early to tell when or if the sales would actually occur.
Refusing to comment specifically on profitability, Mr. Nusim conceded that Channel's Washington-area outlets "were never the greatest stores" and that the Baltimore stores weren't strong enough performers to remain open following a restructuring.
"The Channel name never caught on down there," said John C. Caulfield, executive editor of National Home Center News, a New York-based newspaper that tracks the home-improvement industry. "They've always had profit problems with those stores."
Faced with stiff competition from popular chains such as Landover-based Hechinger Co. in Maryland and Atlanta's Home Depot Inc. in other markets, Channel could not keep up.
"They came into town [in the '70s] and Hechinger did a number on them," said Budd Bugatch, an analyst with Ferris Baker Watts Inc. And though Channel held on, the company was eventually crippled by a debt-heavy leveraged buyout in 1986.
Channel's prospects in Maryland look even bleaker in the face of Home Depot's planned expansion in the state by fall, Mr. Bugatch added.
On Monday, the Whippany, N.J., company filed for protection from its creditors in U.S. Bankruptcy Court in Newark, N.J. Sale of the Maryland stores is an integral part of Channel's reorganization plan to shed nearly 40 percent of its outlets.
"We've made a strategic decision that we are going to be a regional chain" concentrated in the New York, New Jersey and Philadelphia-area market, Mr. Nusim said.
Channel, which employs about 500 people in Maryland, hopes to sell all but one of its stores here. The sole survivor, the Hagerstown location, has always performed well and will remain open, said Mr. Nusim.
Despite the region's weakening economy, Mr. Nusim expressed confidence a buyer would be found for the Maryland stores.
This isn't the first time Channel's faced the sale of under-performing stores. For the past two years, the company has been trying to unload 55 of the its money-losing stores in and around Texas.
The following Channel Home Center stores are scheduled for sale/closing as part of the company's Chapter 11 filing:
7800 Riverdale Road, New Carrollton
Forestville Shopping Center
Rockville Shopping Center
5105 Governor Ritchie Highway, Brooklyn Park
Perring Parkway Shopping Center
Liberty Court Shopping Center
2401 Belair Road, Baltimore
7820 Wise Avenue, Dundalk
8319 Governor Ritchie Highway, Pasadena
8820 Belair Road, White Marsh
2309 Forest Drive, Annapolis
The sole Channel store that will stay open in Maryland:
562 Northern Avenue, Hagerstown