Serv-Well Appliances: in Death Belies Name
Submitted by advisor on Fri, 12/11/2009 - 11:13am.
San Fernando Valley, CA based Serv-Well Appliance shut its doors unexpectedly, leaving their customers who have made deposits so very high and dry. Fifty year old Serve-Well competed with Pacific Sales and California Kitchens in retail. In the 1990's it expanded into the builder business and evidently painted itself into a corner from which it could not extricate itself.
How does a company end up closing its doors unexpectedly, stealing its customer's deposits?
Simple. Run the business full speed ahead while watching the finances degrade beyond reason, and hoping that something, that anything, will drop from the sky to save the company.
These midnight closings are done with eyes wide open. There could have been preventative cuts, business reductions, a change to credit card deposits only. There could have been a declaration of bankruptcy and reorganization or a closure of the business far earlier so that all creditors could have been made whole, maybe with a big "Going Out of Business" sign.
Instead they have chosen to consciously gamble with their customer's deposits and their suppliers inventory, to destroy 50 years of good will in one night and the reputations of all those affiliated with the organization.
Was a crime committed? We certainly hope so.
KCBS News Clip
KNBC: Cash or Credit
And this is why customers do not trust independents...
This is frustrating news. This kind of information is exactly why we have customers who refuse to trust and independent store because of dealers like this. We may be a $20-$30 million business and yet we still have customers who doubt our intentions and our stability. People fear this exactly, the ever present danger of a dealer up and disappearing with your money and no real way to get it back.
victim of the times?
It is always sad when a retailer goes out of business but it is really bad when he takes customer deposits and runs away with the money. Local TV stations have shown customers pounding on the door in the hope of getting either their money back or their purchases delivered. The owner of Serv-Well is well known in the industry and it is surprising that he is not making good on these deposits. But then, desperate people do desperate things, as they say. It reflects poorly on our beloved industry, however, when a retailer steals customer deposits. We must assume that Serv-Well has no money left, not even in the Cayman Islands or under some mattress to make things right. Perhaps he was a victim of the industry downturn, particularly on the builder side. However, an uglier possibility is that Serv-Well went down because of mismanagement and that there was a plan to steal customer money and shortchange vendors. Lets hope not because that will hurt us all.
There's a Reason ...
... why the quote "... like a thief in the night ..." appears in the Bible ... because it is such a recognizable tenant ...
By the time a case is organized and mounted against these people, nothing will be left by debt slips on the floor like you see after every race @ the track !!!