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2004-10-02
Troy, MI. Frank's Nursery, Regional Garden Center Chain, Turned Into Mulch

Companies like Home Depot and Wal-Mart like to describe themselves as "retail magnets" that attract more jobs and sales wherever they go. But this month another major retailer in the home improvement/garden center business was buried by the big chains. After 55 years of trade, Frank's Nursery & Crafts, Inc , once a symbol of the neighborhood garden and crafts store, has filed for bankruptcy and planned to liquidate its inventory. Rather than try to sell the business, it's simply going under, suggesting that competition completely destroyed them. The Troy, Michigan-based retailer watched as sales transferred from its cash registers to Home Depot's. The Detroit Free Press said the company "died of old age," but it wasn't just being old that killed Frank's. Home Depot and Lowe's shoppers killed Frank's. The company, of course, blamed the weather, the economy, and loss of customers -- but they did not say what is obvious: their customers went someplace else, they didn't just vanish. Along with the demise of Frank's, the economy loses 2,800 jobs, and 169 stores located in 14 states will go under. 107 of their stores were leased. At its high point, the company had 257 stores, but had to shut some down in 2001-2002. That's the true picture of economic development, retail-style. Frank's had been so battered, it couldn't get a loan to reorganize its business. So it's holding a 'going out of business sale' at all its locations. Analysts said that Home Depot and Lowe's drove Frank's under. "They didn't differentiate themselves enough," one analyst said. "They didn't set up their own identity." The weeds had been growing through the cracks since at least 2001, when the company first ventured into Chapter 11, when it wasn't meeting its loan obligations. It came out of bankruptcy in 2002, but never had strong enough sales recovery to last. In fact, its same stores sales were in negative terrain. The retailer's bankruptcy filing shows the company's assets were at $124 million and its debt at $141 million. The original owners Frank Sherr and Max Weinberg began their retail career in Detroit, and were described as "the nation's first chain of garden centers." "I do feel sorry that it's going out of business," one customer was quoted by the Lansing State Journal. But when that customer couldn't find the manure she was seeking, she went across the street to a Home Depot.

What you can do: It's a familiar story: regional retailer turned into manure by the dominant, national chains. Most business writers describing this obituary, mentioned either Home Depot, Lowe's or Wal-Mart. What local officials should understand from this business failure is not that a "wet spring" killed Frank's, but that consolidation of power in the retail sector has its cost, in this case, 2,800 jobs. So when city councils are considering whether or not to approve a Home Depot or a Wal-Mart with garden center, they might do well to remember the 2,800 families that lost their wages when Frank's finally hit the soil. The claims of job growth and revenue enhancement have to be weighed against the down-side. The manure that grows Home Depot is made from the compost of its dead competitors. This is not a form of real economic growth, but predominately shifting market shares.










 
 
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