Miami, FL, January 23, 2007--Two years ago, a European investor group launched Floors Today from Miami with the goal of creating a nationwide retailer of hardwood and laminate flooring, according to the Miami Herald.
Floors Today opened about 60 stores before it ran into trouble.
Last month Floors Today turned over its assets in Miami-Dade Circuit Court to a representative, Byron Smyl, who said he planned to sell the company as a going concern.
Last week, Smyl temporarily closed Floors Today's remaining 23 stores, including eight in South Florida, to save cash. A day later, three creditors initiated an involuntary bankruptcy against the chain, putting the state court on hold.
When they closed, the stores employed fewer than 200 people.
Floors Today was started in early 2005 by the management team that built Floors-2-Go into the largest retailer of hardwood and laminate flooring in Britain. They sold that business, then 102 stores, for about $65 million, Smyl said.
It has 140 stores today, according to its website.
A supplier later approached the team--led by Robert Hodges and sons Robert and Richard-- about launching a similar retail chain in the United States.
Floors Today planned to follow Floors-2-Go's growth model and open as many as 300 stores, all in rapid succession, in the United States, according to an outline filed with a 2005 lawsuit against Floors Today by a consultant firm. The case was later dismissed.
According to court documents in a 2006 lawsuit against Floors Today filed by a former employee, it opened about 60 stores with estimated annual sales of $70 million. That lawsuit also was dismissed.
Smyl said Floors Today got pinched by the downturn in the housing industry, though he added he hasn't analyzed what was behind the company's problems.
Creditors' lawyer Gary Freedman said it appears Floors Today overexpanded and ran into cash-flow problems.
Lawsuits filed by suppliers and others against Floors Today, whose parent company is Laminate Kingdom, began piling up early last year.
Some even took the step of filing writs of garnishment, seeking money in Floors Today's bank accounts.
With the number of creditors mounting, Floors Today filed the assignment for the benefit of creditors. The filing lists more than 650 creditors--owed at least $19 million.
At the time of the filing, Floors Today had 37 stores remaining in four states. Fourteen stores were immediately closed before the decision was made to temporarily close the remaining 23 stores.
Freedman filed the involuntary bankruptcy to maneuver the case into U.S. Bankruptcy Court where, he said, creditors have greater say.
He said before the state court action, the Hodges were provided a security interest valued at $320,000. Creditors can seek to void any garnishments and other transactions in the 90 days leading up to the bankruptcy, he said.
The involuntary bankruptcy was filed by three media companies, including The Miami Herald Media Co. Freedman said he will ask the court to appoint a trustee to oversee the business while it is in bankruptcy. A hearing on that request is set for Wednesday.
In the meantime, Smyl said everyone is in a wait-and-see position.
"Everybody's hoping the stores can come back and the company can be restructured," Smyl said.
