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Chief Operating Officer Ted Leveque told the Journal that the company will continue operating as usual and that the bankruptcy proceedings should be "transparent" to customers. The company, which employs 650 people, operates five stores in New Mexico and six in Arizona.
Leveque said American Home is suffering from the national decline in home sales, decreasing consumer spending and the same difficulty obtaining credit that is affecting businesses globally.
"The housing market has affected this industry," Leveque said. "The credit crunch and financial crisis have affected customers and credit available to businesses."
American Home's bankruptcy court petition estimated that it has assets of between $10 million and $30 million and has liabilities of between $1 million and $10 million. The petition says the company owes its 20 largest unsecured creditors almost $4.9 million.
Leveque said he anticipates no work force reductions or store closings "at this time, but we obviously have to go through the process. We need to go to court and discuss our plans. We will probably have an announcement on restructuring in the very near future."
The company expanded from its New Mexico roots more than 10 years ago and now has stores in Albuquerque, Santa Fe and Farmington in New Mexico and Mesa, Prescott, Tucson and Sahuarita in Arizona.
American Home was founded in 1936 by Emanuel Blaugrund, who emigrated from Czechoslovakia after World War I, and was run by the Blaugrund family until three years ago. At that time, a majority stake was sold to Hancock Park Associates, a Los Angeles private equity firm. Hancock Park owns several companies, including retailers and manufacturers.
Blaugrund opened his first store on Central Avenue in Albuquerque. The f lagship American Home store was built in 1968 and continues to operate at Menaul and Carlisle.
Former President and CEO Lee Blaugrund told the Journal a few years ago that the company was also eyeing stores in West Texas, but that never materialized.
For many years, American Home has ranked among the top 100 furniture stores in the country, according to Furniture Today, a trade journal. Kay Anderson, director of market research for Furniture Today based in Greensboro, N.C., in a previously published story credited American's steady growth to its format.
"They were one of the first stores that I call a 'new mix' store. In other words, a traditional furniture store that also carries table-top items, gifts, area rugs and soft goods," Anderson said.
In 2000, American Home changed its name from American Home Furnishings to better reflect the company's "whole home" approach. The company developed a global network of manufacturers and suppliers, from whom American Home buys directly. Blaugrund said he had perfected direct buying decades ago when the company began going to small Mexican furniture makers and commissioning certain lines, such as copperclad tables and trasteros.
Teams of buyers routinely travel to China, India, Pakistan and the Balkans to buy furniture and to commission work.
The Journal reported in 2004 that the company expected more than $100 million in sales that year.
Under Chapter 11 of the federal Bankruptcy Code, a business keeps operating while it works with creditors, under the court's protection and supervision, to come up with a plan to pay as much of its debt as possible and emerge from bankruptcy proceedings strong enough financially to continue in business. Circuit City shrinking
The electronics retailer plans to close 155 stores, but Albuquerque locations are safe C5
To see more of the Albuquerque Journal, or to subscribe to the newspaper, go to http://www.abqjournal.com. Copyright (c) 2008, Albuquerque Journal, N.M. Distributed by McClatchy-Tribune Information Services. For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.
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