Price Busters parent files for bankruptcy


POSTED: Thursday, January 14, 2010

Citing the recession that has deeply impacted its core customers, the parent company of Price Busters and its sister concepts, The Seasonal Store and Let's Party Hawaii, has filed for Chapter 11 bankruptcy reorganization.

ERT Sales of Hawaii Inc., established by Elizabeth Tom in 1992, cites estimated assets and debts of between $1 million and $10 million, including $3 million to American Savings Bank, its primary secured creditor.

Of the top 20 unsecured creditors listed in the filing with U.S. Bankruptcy Court in Honolulu, the largest amount, more than $483,000, is owed to San Diego-based Approved Freight Forwarders. The filing also lists unpaid rent to seven landlords for its nine locations and distribution warehouse totaling about $680,000, as well as amounts owed to numerous vendors.

Calls to Tom were not returned.

“;She's been in business almost 20 years,”; said ERT attorney Jerrold Guben. “;It literally caught up with her overnight.”;

ERT does an average of $24 million in annual sales.





        ERT Sales of Hawaii, which does business as Price Busters, The Seasonal Stores and Let's Party Hawaii, filed for Chapter 11:

» Assets: $1 million to $10 million


» Liabilities: $1 million to $10 million


» Creditors: 200 to 999


» Largest unsecured creditors: Approved Freight Forwarders, San Diego, $483,040; Hallmark, Pasadena, Calif., $195,292; Nygala, Teterboro, N.J., $185,820


» Retail locations: Hawaii Kai, Honolulu, Kailua, Kalihi, Kaneohe, Kapolei, Mililani, Pearl Highlands, Pearlridge, Oahu warehouse distribution center


» Annual sales: More than $24 million


Source: U.S. bankruptcy filing


Tom and her buyers obtained good deals on merchandise from manufacturers and intermediaries “;and the margins were much lower — that's why we need volume,”; Guben said. “;But with the recession hitting her particular demographic, it was very difficult to turn a profit.”;

Discount retailers “;are doing well”; nationally, said Linda Humphers, editor in chief of Value Retail News, a trade publication for the International Council of Shopping Centers.

The publication is focused on outlet retailers, but anecdotally Humphers has seen declines in the party store business. “;I think people have cut way back on that,”; she said.

Hallmark has dropped its party goods line, Humphers noted.

As for Price Busters, “;some of the stores didn't have the greatest Christmas,”; Guben said. “;Some beat the 2008 (Christmas sales) figures, but not enough to catch up with the third and fourth quarter.”;

Price Busters was established to offer deeply discounted merchandise ranging from gifts and gift wrap to candy, housewares and other general merchandise.

Tom's empire grew to multiple locations and expanded further with temporary stores for holidays, including Halloween and Christmas.

Most recently, the company introduced a new concept called Let's Party Hawaii in Kapolei and at Windward Mall, a location that previously had housed Price Busters and The Seasonal Store. Let's Party Hawaii's merchandise mix includes seasonal decorations, costumes, party supplies such as paper goods, themed decorations and party favors, as well as items familiar to Price Busters shoppers.

The company has not laid off employees and was recruiting at yesterday's Job Quest job fair at Blaisdell Center.

Tom hopes to keep the business running normally during the reorganization and will find out “;if the judge allows us to continue”; at a hearing tomorrow morning, Guben said.

As a reorganization plan is hatched, “;we're going to start looking at what we're going to do with some of the stores,”; Guben said. “;Leases may have to be rejected and the staff may have to be slimmed down.”;