Color Tile, once the nation’s largest floor covering retailer, is closing its doors under pressure from lenders and sliding sales.
The Fort Worth, Texas, company confirmed Thursday that all of its 195 company-owned stores will be shut down and 831 employees will be laid off. It was unclear what will happen to the company’s approximately 100 franchise stores.
Color Tile had two stores in Spokane, both of which are closed. The North Side store, at 4223 N. Division, closed July 14. The Spokane Valley store, at 10801 E. Sprague, closed in 1996.
The owner of the region’s remaining store, a Color Tile franchise in Coeur d’Alene, said he has no plans to close.
“We’re not going out of business,” said Louie Persling, who has owned the Color Tile store at 101 Best for three years. Persling said the remaining Color Tile franchises will form their own buying group.
The company had been trying to reorganize its finances since filing for Chapter 11 protection in January 1996, citing liabilities of $526.7 million and assets totaling $381.4 million.
In a written statement, president and chief executive David E. Cicchinelli said the company had no new capital sources and had depleted its cash.
“While Color Tile’s management was encouraged by the improvement of its operating performance during the past 12 months, the thresholds for return on further investment dollars set by our lenders are not attainable, given the company’s over-all condition,” Cicchinelli said.
Ron Baron, who works in contract sales at a store near Fort Worth, said he was told numerous times that the company was recovering.
“I had memos from the first of the month (July) saying Color Tile was ready to jump … We’ve all been led to believe that things were getting better.”
Color Tile had increasingly lost its niche in the industry because of encroachment by superstores like Home Depot and Lowe’s.
From 1990 to 1994, the chain lost $125 million, while paying $184.7 million in debt expenses.
The company was founded in 1953, and was part of the Tandy Corp. empire until it was spun off in 1975 as part of Tandycrafts. It became a separate company four years later.
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