Bankrupt Beautyco
Bankrupt Beautyco shuts stores
By Tricia Pemberton and Don Mecoy
The Oklahoman
Phones rang with no answer and windows were darkened Monday in Beautyco stores across the state.
An employee who would not give his name said the store's locks were changed Sunday night, leaving employees and customers locked out Monday morning.
Company representative Stan Curtis said Beautyco's 34 stores are closed temporarily while the chain negotiates with possible buyers.
"Beyond that I have no further comment," Curtis said.
The closings come as the Oklahoma City-based beauty products retailer wrangles its way through bankruptcy court.
Beautyco Inc. filed for Chapter 11 bankruptcy protection Dec. 31, 2003, listing $3.3 million in assets and $8.7 million in debts. Beautyco Investments filed separately on the same day, reporting assets of $5.2 million and debts of $50,000.
Beautyco, which listed more than 300 creditors in its filing, sought to reorganize the company with an original plan to continue operating stores.
The company has proposed two reorganization plans, with the most recent filed in November 2004. The second plan proposed to reduce the company's secured debt from $6 million to $2 million and to sell newly issued stock in the company to an investor for $2 million. The plan also proposed unsecured creditors receive 5 cents on the dollar for their claims.
The bankruptcy court rejected that plan Dec. 9.
The denial came after an objection was filed by Beautyco's largest creditor, Colorado-based LINC Aquisition One, which is owed $5.5 million, secured by all property and inventory, including Beautyco's home office and warehouse space at 2600 S Meridian.
At the Beautyco store in Belle Isle Station shopping center Monday confused customers barraged neighbor Mike Garretson, who manages The Mattress Firm next door.
"I've probably had 20 to 25 women poke their head in to ask what's going on," Garretson said. "At first I just thought someone didn't show up to work."
Garretson was surprised by the company's bankruptcy problems.
"The store stayed busy all the time," Garretson said.
Carl Wayne Wester, a stylist at the Hair Store on N Western, said he shopped occasionally at the store in the Belle Isle shopping center but not enough for the store's closing to make a difference to his business.
"They can't carry many of the products we use," Wester said. "It's mainly the public that shops there."
Wester said he's not saddened by the store's situation.
"This actually helps our business -- and Wal-Mart's," Wester said.
Larry Rhodes founded Beautyco in 1970. In 2003, the company reported it employed more than 214 people in five states and recently had opened 12 stores.
The company's Web site lists 34 stores -- 32 in Oklahoma and one each in Texas and Mississippi.
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Originally Posted by Ms.Relaxationstation
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