Wednesday, September 24, 1997
Steinberg's trying to keep
stores open

BY LISA BIANK FASIG
The Cincinnati Enquirer

Steinberg's Inc. began reopening its stores Tuesday, a day after the retailer abruptly shut them with the plan to ultimately liquidate under bankruptcy court protection.

The 76-year-old retailer of electronics goods and home appliances is expected to seek Chapter 11 protection, the result of Provident Bank's cutting off financing Friday. As of Tuesday evening, the 22-store chain had not filed at U.S. Bankruptcy Court in Cincinnati, though a turnaround specialist hired by Steinberg's said it should file by this morning.

"These are not pleasant things," said the specialist, Leonard Eppel. "I'd rather turn them around."

Though details of Steinberg's finances won't be released until the filing is made, one source close to the case said Provident is owed about $9.8 million. Other lenders involved are said to be owed from $440,000 to millions of dollars apiece. Provident did not return a call for comment.

As executives of the family-run enterprise organized documents Tuesday, scores of consumers and workers wondered how they'll be affected.

Consumers visited stores seeking either liquidation sales or answers to questions about purchases or deposits. Employees were unsure of their job prospects, even as they trickled back to work Tuesday.

"I was told to show up this morning, so I showed up this morning," said an individual who would identify himself only as assistant manager of the Kenwood store. Like other workers, he said he didn't know much else about the company's future.

What is certain, according to Mr. Eppel, is that Steinberg's will sell off all its merchandise through the holiday season and likely be a memory by early 1998.

Between now and then, he said, the retailer is trying to reopen its stores - it is unclear how many reopened Tuesday - to serve its customers and be decent to its remaining workers. About 75 workers in services and supplies were dismissed from the 300-employee company. Mr. Eppel said Provident will reissue employee paychecks that did not clear.

Steinberg's is making its final plans while the dark memory of Swallen's remains in some consumers' minds. The failure of that well-known Cincinnati retailer in 1995 left scores of shoppers in the lurch. Some consumers lost thousands of dollars in merchandise paid for but never received.

"(Chief Executive Ivan Steinberg) feels a real obligation to the community to do everything that is possible to exit this market with a good feeling . . . about Steinberg's," Mr. Eppel said.

Mr. Eppel said the company is trying to deliver merchandise that has been paid for in full, and he said shoppers should expect to receive products they have bought.

Steinberg's is still working with its lenders - which include Provident, Deutsche Bank and TransAmerica Financial Services - to "make good" on deposits and layaways.

Merchandise that is being repaired will be available at the company's service center in Reading, Mr. Eppel said, though all products might not have been serviced. Manufacturers' warranties will continue to be honored, though store warranties will not be after the bankruptcy filing is made.

Despite issues with its lenders, Mr. Eppel blamed Steinberg's hardship on the superstore competitors that have crowded the area in the past several years. In this market, Circuit City, Best Buy, Sun Television & Appliances and Roberds Grand all sell electronics and appliances.

And shoppers at Steinberg's are familiar with them.

"With Sun and all that in town, when I read (Steinberg's was going bankrupt), I wasn't surprised," said Pat Hayden of Delhi Township, who came to Steinberg's Reading store Tuesday looking for a deep discount on a compact disc player. "Corporate America is taking over."

That opinion was echoed by George Forney, a retired engineer from Procter & Gamble Co., who showed up at the Tri-County store hoping to snatch a bargain. He, too, said the closing of the chain will not affect him.

"It's not like I live in the middle of no man's land and this is the only store. This is not the only place to buy; there are plenty of competitors," the Forest Park man said.

It is unclear whether Steinberg's will conduct liquidation sales from all its stores, most of which are leased. The company runs 10 stores in Greater Cincinnati, the remaining 12 operating in Ohio, Indiana, Kentucky and Tennessee.

Louis Solimine, an attorney for Thompson, Hine and Flory, said retailers typically would like to keep all stores open for optimum exposure. But Mr. Eppel said if operating a store costs more than it can recover from a liquidation, the retailer might consolidate merchandise elsewhere.

Ben L. Kaufman, Tom O'Neill and Phyllis Greene contributed to this report.

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