Growers Top Pike's List Of Creditors
Whenever there is a big Chapter 11 filing in the industry, one of the most unsettling aspects is the ripple effect that can hurt other companies. According to bankruptcy court records, Pike Nursery Holding LLC in Atlanta owes nearly $5.6 million to its
November 21, 2007
Whenever there is a big Chapter 11 filing in the industry, one of the most unsettling aspects is the ripple effect that can hurt other companies. According to bankruptcy court records, Pike Nursery Holding LLC in Atlanta owes nearly $5.6 million to its 20 largest unsecured creditors. At least half of these companies are growers.
At the very top of the list is Monrovia in California, which is owed $716,779. Next is Wight Nurseries in Atlanta, Ga., which is owed $689,289.
On the greenhouse growing side, Wenke Greenhouse in Kalamazoo, Mich., and sister division Sunbelt Greenhouses in Douglas, Ga., are owed more than $500,000 for summer and fall crops. Owner Dennis Wenke says he met with officers of Pike last Monday before the bankruptcy filing, so he knew it was coming. Pike will be paying cash on delivery for poinsettias.
"As of now, I'm not concerned about our poinsettia crop," Wenke says. "Only 20 percent will go to Pike's. The rest are sold through fundraising groups."
He adds that he is optimistic Pike's can pull out of this. "They intend to keep going. Two or three of their board members have put their own money in," Wenke says. "I'm very optimistic about Pike's Nursery. Unfortunately, if it doesn't start raining, it's going to be a hard thing to pull out of."
Although the financial setback is unpleasant for Wenke Greenhouses and Sunbelt, Wenke says the businesses will be able withstand it. "It's unplesant for us. It does send shockwaves to our employees. We've assured them that nobody's pay will be cut and we will be able to withstand this," he says. "It won't affect Michigan at all, but at Sunbelt, most of our sales are in the state of Georgia."
In addition to Pike, Sunbelt is a primary supplier to Wal-Mart, Home Depot and Lowe's. "We are primaries at 21 stores in Southeast Georgia, and there are no water bans there," he explains. "There's no way to predict what's going to happen. Trying to predict what's going to happen in the spring is where it gets difficult."
Another regional grower on the list is Jim Snyder of Riverbend Nursery, with operations in Virginia and Georgia. Pike owes Riverbend about $157,000 for perennials and seasonal outdoor color items, like mums and ornamental cabbage.
Related to the prolonged drought, Snyder says, "We've been managing the best we can but sales are way off target. We're hoping for rain. Gardeners will be happy to get outside once there is water in the ground. It's just a matter of when."
Riverbend also should be able to survive the financial setback, he says. "We'll be able to withstand it. Will it cause some pain? Absolutely," Snyder says. "As a grower, you've got to put money away for the rainy days, no pun intended. Not every year is going to be a great year. It's difficult to do with gross margins being what they are in this industry. We wish Pike the best of luck getting back on their feet."
Costa Farms in Florida is not on the list but has been a foliage supplier to Pike. "It goes without saying that we really understand their pain as we have also been drastically impacted by natural disasters in three major hurricanes in the last 20 years," says Jose Costa, whose family owns Costa Farms. "We at Costa Farms know that the Pike family of garden centers is in a tough spot and we will be here for them when they return on both legs. There is not much Pikes Garden Centers can do in a situation like a drought except wait out the weather change, as the end consumer has no interest in buying a product like a live plant, if they cannot water it at their homes and businesses."
Costa also observes a large shut down in demand for plants in the north Georgia/Atlanta area. "I hope and I am sure that the rest of our fellow friends in ornamental horticulture will help all of our friends in the business in this region who are undergoing this natural disaster business disruption," he says.