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Armstrong moves East

BY Brae Canlen

Armstrong Garden Centers, a 34-unit chain based in California, has purchased 16 stores belonging to Pike Family Nurseries, the Atlanta retailer that filed for Chapter 11 protection three months ago. The $5.2 million sale, approved by a federal bankruptcy judge in the Northern District of Georgia on March 2, will combine the industry’s two largest chains of independent garden centers.

Other pieces of Pike Nurseries were carried off following a February 26 auction. Skinner Nurseries successfully bid $1 million for store inventory and the Geo. Schofield Co. purchased hardscape materials from one of Pike’s wholesale divisions. Gary Pike, a son of founder William Pike, paid $490,000 for inventory and a lease connected to another wholesale operation.

The Armstrong acquisition includes 15 units in metro Atlanta and one store in Charlotte, N.C. Armstrong also retains the rights to the Pike Nursery name, an institution among Atlanta gardeners.

“The opportunity was too great to pass up,” Mike Kunce, Armstrong’s president and CEO, told HCN. Kunce said he is moving his family to Atlanta, where he will serve as general manager of the Pikestores. He will continue to oversee both chains, although Monte Enright, executive vp, will run the day-to-day operations at Armstrong.

“Pike has not been run for several years by hands-on management from our industry,” Kunce observed.

Founded by William Pike in 1958, the company had, at one time, 26 retail locations and several wholesale divisions, including a growing operation, a commercial division, an interior houseplant wholesale division, three stone and aquatic centers, and the Pike Design Group, an installation service provider.

In 2003, the company reported $100 million in sales. The following year, Pike Family Nurseries sold a majority interest to Roark Capital Group, a private equity group also based in Atlanta, saying it wanted more access to capital in order to expand. Randy Pike, another son of the company founder, was named as president and CEO. Pike Nurseries built two more stores in Atlanta and began exploring opportunities beyond the Georgia border. In 2004, the company opened a new store in Birmingham, Ala. A Charlotte, N.C., store soon followed.

But a historic drought in the Atlanta, water restrictions, and the housing slump severely impacted sales. On Nov. 14, 2007, Pike Family Nurseries filed for Chapter 11 bankruptcy protection, saying it owed $5.6 million to more than 20 lawn and garden suppliers. Despite $11.75 million in interim financing, Pike’s assets went on the auction block. A number of creditors objected to the bids, according to court filings, claiming that the inventory and other assets were undervalued.

Buying up 16 Pike units was a bold move for Armstrong Garden Centers, an employee-owned company based in Glendora, Calif. Armstrong has slowly built its chain of upscale nurseries over the years, closing and opening units to get better locations or larger facilities. Most of its stores are in Southern California, with only two locations, Nova to and Dublin, in Northern California. “No growth” policies in Bay Area communities have made it difficult for Armstrong’s to open new units there, according to Kunce.

“We have now shifted out emphasis to purchasing existing garden centers and remodeling them,” Kunce said. “We will go forward with trying to make acquisitions [in Northern California] this fall.”

As for the challenges of the Atlanta market, Kunce is undaunted. “The drought will pass [and] the state will adopt a new watering policy,” he said. The housing down turn may affect professional landscapers, but homeowners will continue to enjoy their backyards, according to Kunce. “The retail garden centers will do fine,” he said.

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Orchard Supply names new execs

BY HBSDEALER Staff

San Jose, Calif.-based Orchard Supply Hardware (OSH) has announced the appointment of Robert Burgess as associate vp-consumer marketing; and Janis Healy as associate vp-visual merchandising.

Burgess has a 20-year career in developing consumer strategies, having held senior marketing positions with Verizon, West Marine and major consumer marketing agencies, including Rupp Collins and Bunn Forbes.

Healy has a 30-year career of leading store theater and visual brand positioning at several retailers, including Petco, West Marine and Best Buy. Healy most recently served as associate vp-visual merchandising and store design at West Marine.

Both positions will report to Tom Carey, chief marketing officer at OSH.

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Sears launches ‘ReImagine You’ campaign

BY HBSDEALER Staff

Hoffman Estates, Ill.-based Sears has launched a new marketing campaign in an effort to boost excitement about the brand in the wake of the company’s less-than-optimistic year-end financial results.

The campaign, called “ReImagine You,” launched March 1 and will run to the end of May. The push is aimed toward helping consumers find interesting and economical ways to improve their homes.

“ ‘ReImagine You’ aims to inspire imaginations and provide the tools and advice to make practical dreams a reality,” the company said in a release. Specifically, the company plans to use spokespeople including Eric Stromer, host of HGTV’s “Over Your Head,” and Ty Pennington, handyman for ABC’s “Extreme Makeover: Home Edition.”

Sears has launched a Web site, reimagineyourself.com, featuring tips from Stromer, Pennington, NYC interior designer Eric Cohler and an expert on “green” home improvements, Deborah Barrow.

The company also plans to renovate the homes of 70 veterans of the armed forces on April 26 as part of National Rebuilding Day.

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