Puerto Rican retailer Pitusa consolidating, selling assets
In a move to continue achieving operational efficiencies, Puerto Rican retailer Pitusa is consolidating its hardware store business under its Metropolitan Lumber & Hardware Inc., a company it founded in 2009, News is my Business learned.
The move would transfer about $21.4 million in assets from National Lumber to the other corporation, including all existing contracts, real estate, land, improvements, equipment, vehicles and inventory related to 12 stores, Pitusa President Israel Kopel confirmed Monday.
“The businesses were split and we decided to combine them for the sake of efficiencies in distribution, billing, accounting,” Kopel said, noting neither employees nor suppliers, nor customers will be affected. “It’s just about achieving greater efficiencies.”
The company informed its suppliers about the consolidation that takes effect Nov. 30 in a letter mailed last week, in which Kopel says the goal is to “achieve a much stronger, dynamic and efficient company to be able to compete with the large chains and mega-stores that have taken over and continue monopolizing the Puerto Rico market.”
The move outlined in the letter is the latest in a string of decisions retailer Pitusa has been making in recent years to tighten up its operation.
Published reports have confirmed that Pitusa has been in trouble for the better part of the past three years, during which it has been consistently negotiating with suppliers to condone part of its burgeoning debt.
“We, like everyone, have had our challenges and the recession affected us, but we’re tightening screws and removing fat to continue moving forward,” said Kopel, who has been a fixture in the island’s retail market since establishing Pitusa 50 years ago.
In December 2011, Pitusa confirmed it was exiting the supermarket business, selling or closing the 16 stores that made up the islandwide discount food chain.
On Monday, Kopel denied that the latest transaction involving National Lumber pursues shielding assets in preparation for a possible Chapter 11 bankruptcy protection filing, as a source close to the deal told this media outlet.
“We have no plans to file for Chapter 11,” he said.
Meanwhile, Kopel also confirmed the sale of Pitusa’s Muebles y Enseres furniture business to Superbuy Furniture, a company owned by the sons of the founders of Mueblerías Berríos, Puerto Rico’s largest locally owned furniture chain.
The transaction involving the transfer of 22 Muebles y Enseres stores is expected to close Dec. 4. The executive refrained from revealing the financial terms of the transaction, citing a confidentiality agreement.
Pitusa has some 4,000 employees in Puerto Rico.