DIY Home Warehouse to close remaining stores - northeastern Ohio - Brief Article - Statistical Data Included

Home Channel News, July 2, 2001

Company officials point the finger at big-box competition

VALLEY VIEW, OHIO -- Add DIY Home Warehouse to the growing list of home improvement retailers who this year have fallen victim to challenging market conditions.

On June 19, the troubled retailer announced that it would close all six of its home improvement warehouses -- all located in northeastern Ohio -- by the end of the summer. The company planned to hold a going out of business sale in late June that would run until the end of August.

In a prepared statement, DIY officials wrote that they had decided it would no longer be able to "operate profitably on a long-term basis given the continued competitive pressures from national warehouse retailers in its markets."

This move follows an April downsizing effort that closed three stores in Brook Park, Medina and Mentor, Ohio. At that time, DIY stated that those warehouse stores were closing mainly because of poor sales performance. The April downsizing was a response to an extremely rough 2000 in which DIY Home Warehouse's revenues sunk 41 percent to $75.6 million and its net loss increased fivefold to $8.4 million. Its 2000 compstore sales plummeted 33.6 percent as well.

In recent years the 16-year-old regional chain was beset by heavy competition in its northeast Ohio markets. Just three years ago DIY operated 14 units. Since then the retailer has been steadily decreasing its store count and product mix in an effort to, as much as possible, avoid direct competition with big-box chains. Combined, Lowe's and Home Depot operate more than twenty warehouse outlets in Cleveland and northeast Ohio.

DIY officials said they believed that the proceeds from the sale of their stores' merchandise, furniture, fixtures and real estate would exceed any financial obligations. Any leftover funds would go toward "maximizing" shareholder value. DIY said it would retain an investment-banking firm to guide it through the closing.

Though only halfway complete, 2001 has been a tough year on home improvement retailers. Other companies who closed or will close this year include Melville, N.Y.-based chain Pergament Home Centers and St. Louis-based pro dealer Hill Behan. Even more retailers have filed for Chapter 11 bankruptcy protection including Payless Cashways, Frank's Nursery, West Lumber and Woodworkers Warehouse.