Update: New ownership group acquires Carls Patio after bankruptcy filing
January 25, 2013,
BOCA RATON, Fla. - A new ownership group is set to acquire casual furniture retailer Carls Patio after the company voluntarily filed for chapter 11 bankruptcy protection on Jan. 21 in Delaware.
Carls Patio operates 10 stores and a warehouse in Florida and an e-commerce site, patiofurniture.com. The company previously closed five stores in California operating under the Berks Patio name and four stores in Florida before the bankruptcy filing, according to a declaration filed with the U.S. Bankruptcy Court District of Delaware.
According to the U.S. Bankruptcy Court filing, Carls Patio's 20 largest unsecured creditors include the following trade debts to outdoor furniture manufacturers: Woodard, $2.16 million; Woodard Landgrave, $440,669; Lloyd Flanders, $444,746; Les Jardins, $106,123; Agio, $83.827; Brown Jordan, $82,311; Rogers Cushions, $62,718; Galtech, $53,865; Gloster, $51,588, and Century Patio, $45,347. Landlord creditors include Krebs LLC in Chicago, owed $183,000, as well as Agoura Design in Los Angeles and Design Center of the Americas in Dania Beach, Fla., owed slightly less than $50,000 each.
Efforts by Casual Living to reach Otowchits have been unsuccessful, but he told the Sun Sentinel of Fort Lauderdale, Fla., "The new ownership group is the one who is purchasing the company out of bankruptcy. We are confident [the bankruptcy proceedings] will happen pretty quickly and we want to get through it."
According to the declaration filed with the bankruptcy court, the company cites several reasons for the filing including the economic downturn, increased competition in the market, unsuccessful strategic initiatives and "increased fixed costs through store expansion that raised the breakeven level of the company and constricted flexibility in cost saving initiatives in response to demand factors."
Otowchits told the Sun Sentinel day-to-day operations at Carls Patio would not change under the new ownership, and there are no plans to lay off employees. He also told the newspaper the company plans to expand its operations throughout Florida.
Carls Patio's original press release announcing the acquisition by Weinberg Capital Group follows:
Carls Patio announced today that an ownership group has signed a purchase agreement to acquire the assets of the company from the current owners and to expand its store operations in Florida and online. The group is led by Paul Otowchits, who will be appointed the president of the new company, with investment support from the Weinberg Capital Group of Cleveland.
The acquirer, which will continue the name "Carls Patio," will operate nine stores on the east and west coasts of Florida as well as offering outdoor furniture and accessories via the company's website, www.patiofurniture.com. The new business will continue in its present form, maintain all employees, and will honor all current sales and deposits made against those sales, a press release states. Carls Patio will continue to carry its current brands in addition to new brands that are planned.
Otowchits, who has been with the former company for 19 years and is a veteran of the outdoor and casual furnishings industry, will be stepping up as the president of the new entity and one of its owners.
"There is a vibrant trend toward the outdoor lifestyle, and I am excited that we are able to help homeowners and other establishments be a part of it all," Otowchits said. "We are launching the company under new auspices, investing additional capital and all of our management and associates are excited about the prospects."
The new group has signed a definitive purchase agreement for the transaction, and the new company will add additional equity financing to support the transaction, the planned new store growth and store upgrades. According to the release, the new company intends to continue with nine stores in Florida and add additional stores in the state over the next five years. Further, the company will enhance and expand its website to make its offerings available throughout the world.
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