Monday, November 8, 1999

MidPac Lumber
preparing to close

The debt-plagued Mapunapuna
store, still hoping to survive, has
begun liquidating its inventory

By Peter Wagner


Burdened with $3.2 million in debt, longtime Mapunapuna building wholesaler MidPac Lumber Co. is on the verge of going out of business.

Signs posted on the store today advertise a 45-day "going out of business" sale.

"The company's been having financial problems since June," said Ted Phelps, a California consultant trying to help MidPac find a way out of debt.

"We've made efforts to recapitalize the company but to date these efforts have not been successful."

Phelps said MidPac will liquidate its inventory to reduce its debt, but still hopes to find a way out of its predicament. "It is our intention to remain in business in some form but that's yet to be determined," he said.

Phelps, president of Phelps Associates, a Glendale, Calif.-based consulting firm specializing in corporate turnarounds, said poor decisions on merchandise buying led to the company's debt.

MidPac, founded in 1956, was sold in March 1998 to CGBN Inc., an offshoot of CG Investment s, which owns Maui Home Supply. CGBN planned to open a MidPac store in Kahului, on the 10-acre site of the Maui Home Supply store, but the new store was never built.

CGBN Chairman Kurt Glassman was away on business today and could not be reached for comment.

Phelps said he was not at liberty to disclose what if any impact MidPac's financial problems will have on the Maui Home Supply. The 150,000 square-foot Maui store is the largest Whirlpool distributor in the state.

MidPac, the company's only Oahu holding, had 108 employees at the time of last year's sale. It currently has about 50 employees, following about 40 layoffs in the past two or three weeks, Phelps said.

MidPac Lumber in 1963 sold its retail subsidiary, MidPac Hawaii, with six stores on Oahu, to concentrate on wholesale building materials. Phelps said the company does not seriously compete with Home Depot, Eagle Hardware or other large mainland-based retailers that have had an impact on Hawaii-based home supply retailers.

Phelps said several earlier attempts to secure financing from private investors and a local bank fell through.

"The company is making efforts to either find investment capital or new debt to put the company back on its feet," Phelps said. "We're not going to give up until we've exhausted all possibilities."

Meanwhile, MidPac Lumber hopes to remain in business at least through Christmas, he said.

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