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Wednesday, May 25, 2022

Chain of Bankruptcies Catches Up to Major Distributor

Chain of Bankruptcies Catches Up to Major Distributor

Retail – Deborah Belgum

BMK Inc., one of the nation’s largest distributors of general merchandise to drugstores and supermarkets, is short of cash and looking for an investor.

A series of financial mishaps forced the City of Commerce company to file for Chapter 11 bankruptcy protection on Dec. 3.

Earlier this year, several of its own customers filed for Chapter 11, including Furrs Supermarkets Inc., Phar-Mor Inc., and Drug Emporium Inc. Also, the company was hit with $1 million in costs associated with a recall of scooters it sold to Rite Aid, said Chief Executive Richard Craig, who has been with BMK for 35 years.

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, which makes it difficult to find financing.

Operating costs have been cut by $12 million by reducing the workforce, consolidating facilities, cutting freight costs and improving inventory turnover. BMK has retained the financial advisory firm of Houlihan Lokey Howard & Zukin Capital.

“We are looking for a partner who understands and is willing to invest in our business,” Craig said, who added that the filing will not affect operations.

BMK, founded in 1960, distributes everything from cosmetics to pet supplies to the country’s top supermarkets such as Ralphs and Albertson’s.

The Shoe Man Cometh

Say goodbye to Jessica McClintock and hello to Walter Steiger.

Jessica McClintock, the San Francisco-based purveyor of fancy and frilly prom dresses, wedding gowns and anything with lace, is closing its flagship store at Two Rodeo Drive in Beverly Hills after 10 years at the faux European complex.

The lease for the 2,200 square-foot space is being taken over by Walter Steiger, a high-end European shoe store with only one other store in the United States. All Steiger’s shoes are made in Italy.

Walter Steiger, the Swiss businessman who started the company, came to town in August with CEO Henry Doehla to scout locations.

“We looked at a few sites and were a little disappointed,” Doehla said. Then the Jessica McClintock space, which faces Wilshire Boulevard, became available. After signing a 10-year lease, Walter Steiger expects to be open by the first week in February.

Brotherly Love

While shoppers mill around the new Hollywood & Highland retail center, two sets of brothers are putting the finishing touches on the complex’s new nightclub called Highlands.

The nightclub had been expected to be open by now, but its debut is now scheduled for Dec. 26, said Henry Eshelman, a spokesman for the operators. The two-story club is being developed by Kenny and Tod Griswold, and twins Jim and Nick Colachis.

Ken Griswold has done a number of ski resort developments in Park City, Utah. For 10 years he was president and chief executive of Wolf Mountains Ski Resort. His brother Tod has spent the past 10 years working as a tour program developer for international tour company Tauck World Discovery.

Jim Colachis was president of the L.A. nightclub Vertigo in downtown L.A. from 1986 to 1994 and most recently was president of Streaming Security. His twin brother Nick has operated several restaurants and nightclubs, including Vertigo. But Nick is probably best known for his calendars called “Men and Women of USC Looking Good!” which were published from 1982 to 1990.

Staff reporter Deborah Belgum can be reached at (323) 549-5225 ext. 228 or at

dbelgum@labusinessjournal.com

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