Strouds to Expand, May Move Offices
By JENNIFER BELLANTONIO
Orange County Business Journal
The new owners of Industry-based Strouds Inc., out of bankruptcy protection, plan to expand in Southern California and possibly relocate its headquarters to Orange County.
The ailing bed and bath retailer, which has been losing business to Union, N.J.-based Bed Bath & Beyond Inc. and Clifton, N.J.-based Linens ‘n Things Inc., is scouting locations in Orange and San Diego Counties for up to three new store sites. The company also wants to consolidate its corporate operations in Orange County or elsewhere in Los Angeles, according to Walter Cruttenden, Strouds’ chairman and majority shareholder.
“Hopefully in a month we can have a decision made,” he said.
The retailer has a 40,000-square-foot office, 100,000-square-foot distribution center and 50,000-square-foot Internet fulfillment center in Industry.
Cruttenden leads Strouds Acquisition Corp., which brought the retailer out of bankruptcy last spring for $39.5 million. He’s also head of Cruttenden Partners LLC, a private investment firm in Newport Beach, and started what now is Newport Beach-based Roth Capital Partners LLC.
As part of the deal, Strouds, which ran into credit trouble, went from public to private and closed 20 unprofitable stores, leaving the new owners with 50 stores, mainly in California.
Annual sales are estimated at $160 million to $170 million, down from $230 million when Strouds operated 70 stores.
The bankruptcy proceedings also got the company out from under more than $25 million in debt, Cruttenden said. Strouds emerged from bankruptcy in May and now is profitable, he said. “It’s a painful process for the old shareholders, but for the buyers it’s a way to end up with a clean streamlined organization,” Cruttenden said.
Several existing employees, who invested in the company, were promoted to executive status. Among them are Robert Valone, former merchandise manager, who now is president, and Chief Financial Officer Gary Van Wagner, who added the title of chief operating officer.
Strouds has spruced up stores, instituted employee training programs and refocused on bed and bath products.
Cruttenden said that after founder Bill Stroud became ill and left the company, the old management team took the store in too many directions, including adding jewelry to the merchandise mix, expanding into the Midwest, and developing “superstore” concepts. Those have closed.
“We had trouble when we started doing stores that were too big,” Cruttenden said.
