A leading luxury retailer, Pirch, has suddenly shut down all its stores and declared bankruptcy.
The upscale appliance store filed for Chapter 7 bankruptcy on Friday, April 19.
Pirch Closes Stores, Plans Business Strategy
Pirch, a showroom company based in San Diego County, California, known for its luxury appliances, has rerun into financial troubles.
The company's website announced on March 20 that it would temporarily close all its stores. "This is a pause of business to allow management to complete a go-forward plan," the statement explained.
The website continued, "We are exploring various options. "We take this situation very seriously and are working diligently to resolve it."
Pirch has not set a date for its showrooms, warehouses, or offices to reopen. This closure affects all its locations in California, including La Jolla, Glendale, Costa Mesa, Rancho Mirage, Solana Beach, and Mission Viejo.
The company also planned to open a new store in Santa Monica.
A decade ago, Pirch captivated customers with its luxury appliances and an award-winning shopping experience that included fully operational faucets and stoves. The company initially adopted a direct-to-consumer approach, even opening stores in malls, highlighting the essential role of design and building professionals in selling high-end appliances.
Over time, Pirch scaled back its physical store expansion and shifted away from traditional retail to focus on its origins in California. It aimed to strengthen relationships with interior designers, architects, builders, and other key intermediaries in the industry.
However, these partnerships have become strained. Recently, some interior designers facing issues with unfulfilled orders were caught off guard by the sudden closure of Pirch's showrooms.
In response, they have grouped and sought legal advice, as discussed in an April post on Pure Salt Interiors' website. Pirch has remained largely silent about its plans.
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Pirch Files for Bankruptcy Amid Financial Crisis
Pirch, a luxury appliance retailer, filed for bankruptcy with the U.S. Bankruptcy Court for the Southern District of California just two days after informing employees about store closures, reports The Orange County Register.
The bankruptcy documents reveal that Pirch has between 1,000 and 5,000 creditors. It is reported that the company is facing liabilities ranging from $100 million to $500 million, with assets only between $10 million to $50 million. Additionally, Pirch ceased all operations at the end of March, leaving many customers with unfulfilled orders and landlords without rent payments.
Chapter 7 bankruptcy involves liquidating assets to repay creditors, which Pirch is undertaking.
Whitney Solomon, an owner of an interior design business who had collaborated with Pirch for years, expressed her dismay to NBC affiliate KNSD: "I think this is like a horror story," she said. "I don't think I've heard of anything like this ever happening."
In recent months, Pirch has faced multiple lawsuits from customers, landlords, and employees regarding layoffs. Moreover, American Express sued Pirch for $33 million in early April, adding to the company's legal troubles.
Additionally, a former Pirch customer has filed complaints with the district attorneys in San Diego and Orange County, California, calling for investigations into the luxury appliance retailer's alleged breach of contract and fraud.
This year has seen a significant uptick in retail bankruptcies, with several prominent names seeking court protection. The Body Shop and Joann Fabrics filed for bankruptcy in March, followed by 99 Cents Only and clothing store Express, which filed for Chapter 11 bankruptcy in April. This string of filings highlights ongoing challenges within the retail sector.
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