Scotty's Files Chapter 11
Winter Haven, FL, September 15--Scotty's Inc. has filed for protection from its creditors under Chapter 11 of U.S. bankruptcy law, according to the Lakeland Ledger.
"The company was surviving against the bigbox competitors, Home Depot and Lowe's, until Hurricane Charley destroyed the company's largest store in Punta Gorda and seriously damaged several other stores," the Scotty's statement said. "The damages from Hurricane Charley were simply more than the company could sustain."
The statement added that Scotty's expects to emerge from Chapter 11 "and return to profitability within a reasonable period of time."
Lora Kellogg, the company's vice president of marketing, declined to elaborate on the statement, which was faxed to The Ledger late Monday afternoon.
Evanda Hugh Sweet, then a farmer, founded the company in 1924 in Winter Haven.
It grew to a hardware and building supply chain that went public on the American Stock Exchange until it was purchased by a Belgian company, GIB Group, in 1998. At that time, Scotty's had 164 stores in Florida and neighboring states and an estimated 6,000 employees.
In 1998, a senior management team, including current president Tom Morris, purchased the company from GIB for about $100 million. Four years later, the chain was down to about 60 stores, most in small, rural communities where Scotty's attempted to find a market niche, and about 1,100 workers. In 2003, Scotty's sold its 52-acre headquarters and warehouse in Winter Haven to W.B.S. Properties of Boca Raton, which turned it into a business park. The sales prices was not disclosed, but Scotty's had sought $9.25 million for the property.
Within the past few years, Scotty's has transformed its stores from large (20,000 square feet plus) hardware and home improvement supplies to small hardware stores of 10,000 square feet or less.
It also converted some large stores to outlet malls or flea markets and sold or leased other properties to various businesses and organizations, including a church at a South Lakeland location.
Scotty's has two remaining stores in Polk, where it had eight in the late 1990s. The Auburndale hardware store is being closed and converted into an outlet mall. The Haines City hardware store remains open.
In January, Kellogg told The Ledger that Scotty's was planning to open 20 outlet malls in Florida, not all at former Scotty's locations.