Distribution Firm Agrees to Sale as Bankruptcy Ends
Retail
by Deborah Belgum
BMK Inc., one of the country’s largest distributors of general merchandise to drugstores and supermarkets, has entered into an agreement to be sold to an affiliate of Florida-based Sun Capital Partners Inc. for $55 million in cash as it prepares to emerge from Chapter 11 bankruptcy.
Sun is expected to invest additional funds to capitalize the business and keep the current staff, said BMK Chief Executive Richard Craig.
The sale must be approved by the U.S. Bankruptcy Court on April 10 and is subject to overbids.
BMK, a Commerce-based company that filed for bankruptcy protection in December, expects to receive competing bids until mid-May and then close a sale as soon as possible, Craig said.
“We’re a good company that had some capitalization issues,” said Craig, who has made at least eight presentations to interested investors. Two more presentations were planned.
Craig said the company has $400 million in annual revenues and is profitable, but it also has taken on more than $100 million in debt after several of its customers filed for Chapter 11 bankruptcy protection, including Furrs Supermarkets Inc., Phar-mor Inc., and Drug Emporium Inc.
BMK, founded in 1960, distributes everything from cosmetics to pet supplies to the country’s major supermarkets such as Ralphs and Albertson’s.
Personal Growth
Seeing a niche for stores that specialize in personal care products, Encino-based Pure Beauty is on a major expansion spree.
The 56-store chain started in 1999 will add six or seven stores, primarily in Southern California, by the beginning of May and expects to have at least 70 stores in the chain by year-end.
The company, formed by Larry Freeman and Brett Saevitzon after their Freeman Cosmetics Corp. was sold to Dial Corp. in 1998, is getting much of its expansion capital from Heritage Partners, a $1.4 billion equity fund in Boston.
The expansion will focus on California this year. Next year, the company expects to launch a number of stores in Texas, said Saevitzon, the company’s president and chief executive.
Ladies Only
In Los Angeles, shopping centers are trending toward open-air malls. But Altoon + Porter Architects of Los Angeles recently finished a retail project in Saudi Arabia that creates a private and enclosed environment where women can take off their veils and long robes and shop in casual clothes.
The entire third-floor retail level of the Kingdom Centre, a mixed-use project in Riyadh, is sealed off from men. Women can drive up to the third-floor level, enter the complex and check in their veils at what is called the “Ladies Kingdom.”
“The idea was to provide a comfortable environment where the tenants of Islam could be observed,” said architect Ronald A. Altoon, who helped develop the women’s-only concept, a first in Saudi Arabia.
Staff reporter Deborah Belgum can be reached at (323) 549-5225 ext. 228, or at
[email protected].
