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Wednesday, Mar 27, 2024

Adios, Amigos: Last Store of Retailer Sold

The inventory of the last remaining Amigos Flooring store will be sold as part of the bankruptcy proceedings of the former high-flying retailer. Cintek System Inc. will purchase the inventory for $200,000 and will take over the lease for the store in the 13000 block of Saticoy Street in North Hollywood unless a bidder offering a higher amount steps forward. The liquidation marks an inauspicious end to a company noted for its fast growth which then filed for bankruptcy protection when its fortunes turned. At its height, Amigos had nine locations in Los Angeles and Orange counties, with headquarters in Woodland Hills. The North Hollywood store was the last remaining one. Cintek, a flooring importer based in Compton, appeared in the Valley bankruptcy court Feb. 6 to buy the equipment, goods and furniture at the store along with the names, trademarks and logos of Amigos Flooring and Amigos Flooring Monster. “Part of what they are buying is the name and the goodwill of the company,” said Steven Spector, an attorney representing the company. “Presumably they will infuse working capital into a new entity that will be successful.” The North Hollywood location will still be called Amigos and the intention of Cintek is a return to the business plan of low overhead and factory-direct pricing that made the company successful in the first place, said national sales manager T.J. Blackburn. The Saticoy Street store has been operating while the bankruptcy case has wound its way through the court process and Cintek plans to keep the 11 employees still working there. Blackburn worked at Amigos through March 2005 as the purchasing director, a position he described as being second-in-command to founder and CEO Michael Cope. Cintek supplied flooring materials to the chain. Moving away from the warehouse atmosphere and leasing fancier buildings with higher rents was the company’s primary mistake, Blackburn said. “When there was a downturn, they couldn’t make it,” Blackburn said. Cope founded Amigos in 2001 in North Hollywood. It quickly grew to nine locations employing more than 135 people. The change in strategy started with a West Covina store, which was pricier than other locations the chain had at the time. It was located near the freeway and did well because of the real estate boom. The chain’s next location on Topanga Boulevard in Woodland Hills followed that same process of tonier digs. Those were heady days for Amigos. The company ranked No. 4 on the Business Journal’s Fastest Growing Private Companies list in 2005 with a one-year growth rate of 130.5 percent. It also landed at number 24 in the Hot 100 for 2005 list at Entrepreneur.com. But by early 2007, Cope was filing for bankruptcy protection, closing five stores and letting 25 employees go. In its court filings, Amigo’s delineated unsecured debts of just under $2 million, mostly attributable to suppliers, landlords and advertising expenses, and a secured loan for $1.5 million from Bank of America. The documents do not specify assets. In an April 2007 story in the Business Journal, Cope stated the filing was necessary to extricate Amigos from the leases on the closed stores. “The only way to get out of those long-term leases is with a Chapter 11,” Cope was quoted in the article. “One landlord worked out a favorable deal, but others put the screws to us. That, in combination with the inflexibility of some of our bigger creditors, forced our hand.” Attempts to reach Cope through Spector were not successful. He is no longer working for the company. Although he was gone from the company by the time of the bankruptcy and store closures, Blackburn called it “sickening” how far Amigos fell, taking with it the employees who lost their jobs. With the knowledge gained from when he worked there Blackburn said he wants to get Amigos back to what it used to be. “It still has people who pull up in the parking lot all day every day,” Blackburn said. “There are a lot of people who had a good experience who don’t know about the bankruptcy.”

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