MELBOURNE, FLA. –
Appliance Direct, the Central
Florida majap chain known for CEO Sam Pak’s aggressive,
price-focused TV commercials, has filed for
Chapter 11 bankruptcy protection.
The voluntary filing, made April 21 with the U.S.
Bankruptcy Court’s Orlando division in the Middle
District of Florida, cited the “historic, unprecedented
decline in the economy, and the decreased consumer
spending on home appliances … [which] had a significant
impact on operations.”
The closely-held company, founded in 2002, also
attributed its inability to pay creditors and service its
debt to “an unsuccessful expansion effort” in which
it assumed the leases to 16 former Rex stores in Alabama,
Florida, Georgia and Mississippi in 2009.
At its height in 2006, the chain ranked 20th on
TWICE’s Top 100 Appliance Retailers rankings –
ahead of Nebraska Furniture Mart, Sears’ The Great
Indoors, Fry’s and Kmart – with $102 million in sales
and 21 stores.
The retailer is now down to eight locations, which
generated between $35 million and $38 million in net
sales last year, according to court documents.
Its largest creditors are Whirlpool, which is owed
$5.5 million; GE, owed $2.8 million; and LG, owed
$2 million. The company put its net worth at about $6
Appliance Direct attorney Scott Shuker said the company
has worked out a $5.3 million payment agreement
with Whirlpool which will allow it to emerge from bankruptcy,
according to a report in Florida Today.
Appliance Direct has 47 employees that are “leased”
through a third-party firm. All report to Pak, who owns
75 percent of the business, and his president and
treasurer Mark Salmon, who owns 25 percent.