NPR's Tovia Smith is following the economic fortunes of Bowl & Board, a family-owned chain of housewares stores in New England. This is her fifth story about the business. Read the series here.
Bowl & Board owner Mark Giarrusso is an avid ice hockey and lacrosse player who tends to approach his business much as he does his sport.
So, heading into bankruptcy court for what he calls his "do-or-die round," he's got his game face on.
"I'm feeling like, bring it on," he says outside the courthouse. "We're a profitable business. I'm confident."
Bowl & Board fell behind on rent at its Brookline, Mass., store. The landlord sued and got a court to freeze the store's bank accounts. As a result, the company filed for bankruptcy protection.
An Effort To Restructure
Now, Giarrusso wants to reorganize. But the landlord is trying to get him to liquidate. The landlord's attorney, Rosemary Macero, has been arguing it's the only way her client will ever get paid.
"Our position is once that cash is gone, it's disappeared and we're never going to see it again because this business is in a failure mode," she tells the judge.
But Giarrusso managed to break even for the period from mid-February to mid-March, right before his court date. The judge decided to let Bowl & Board keep going for another 60 days.
"In bankruptcy, the name of the game is to live on to fight another day," says Martin Desmery, Giarrusso's bankruptcy lawyer.
But back at the store, the fight seems to be getting harder — despite the warmer weather, which brings out pedestrians, and President Obama's suggestions that his economic stimulus plan is beginning to work.
Giarrusso isn't seeing it. "No way. Not in our world," he says.
Sales in April were even worse than they were in the winter. And Giarrusso doesn't see things improving anytime soon, judging by what's happening with his suppliers.
"My factories are my canary in the coalmine," he says. "What they produce is what I'm selling three to six months from now. And they're not producing. They're going part time, [imposing] forced vacations. I don't know of a single factory that's running five days a week."
Usually, at this time of year, Bowl & Board would be bulking up on new spring merchandise. But between the lack of customers and the pressure to show a constant profit, the business can't buy anything new to put out on the floor.
"It's all the same," says store clerk Becky Boguzis. "We just switch it around a lot."
When vendors call, bookkeeper Polina Paunova explains the store can't spend any money.
Adding His Own Inventory
Meantime, Giarrusso has come up with some creative ways to boost his inventory. He spends hours in a makeshift woodshop in the basement of his store in Somerville, Mass. There, he builds oak tables out of old wooden display racks from his stores that have closed.
"These are from the '70s," he chuckles. "Remember oak was hot back then?"
Giarrusso sands down the old yellowed varnish until he gets a fresh natural finish for a customer who's ordered a custom table. It will sell for close to $500, and all but the $15 he spent on hardware will be profit.
Giarrusso knows that making his own furniture is not a sustainable business model. And it's not the way Bowl & Board has operated for decades — buying big to sell big.
The Restrictions Of Bankruptcy Protection
But with the pressure of Chapter 11, Giarrusso's hands are tied. He can't pick up a customer order without first calculating the miles and considering his gas budget.
He can't print flyers to help advertise a sidewalk sale. And he still can't buy inventory in bulk quantities, which would give him a better deal.
It all takes a toll on the operation, and it's limiting his ability to make big sales.
Searching For A Way Out
Giarrusso concludes the only way to escape Chapter 11 is to reduce the rent he's paying at his remaining two stores. Having tried that, unsuccessfully, in the Brookline store, he's not too hopeful. But his lawyer insists he try to persuade his landlords that keeping Bowl & Board as a tenant is a better alternative than having an empty store.
Just six months ago, Giarrusso couldn't fathom closing even a single store. Now, there are days he can't imagine staying open another minute.
He's already been hospitalized from the stress. He's given up more than half his salary, and his three kids have given up everything from after-school sports to hot showers since he can't afford to fix their water heater.
Giarrusso has even considered laying himself off and overseeing the remainder of business while working at another job to support his family. But his lawyer said it's not possible.
He's in this game, win or lose, until the clock runs out.