Unrelenting Drought Forces Pike Nurseries to File Bankruptcy
Pike Family Nurseries filed for Chapter 11 bankruptcy protection last Wednesday, citing the unrelenting drought gripping the Southeast region of the country, reports the Atlanta Journal-Constitution.
According to the paper, the "heralded Norcross-based chain" said it will continue to operate, and fully staff, most of its 22 nurseries in Georgia, Alabama and North Carolina with the help of 11.75 million in financing.
The chain is considering closing two locations in metro Atlanta in Lawrenceville and Conyers. The plan is to keep Pike's 750 employees on the payroll but the company wont be hiring the usual 200 helpers for the planting season, AJC states.
News of Pike's bankruptcy highlights the devastating impact the drought is having on the state's multi-billion dollar growing industry. Parts of the state are currently under a total water ban, and the growing industry is reeling from the impact of severe government mandated water restrictions.
"As a result of one of the driest summers in history, growers, nursery operators and landscape designers across the state have either laid off employees or closed their doors," the paper reports.
Wayne Juers, vice president of learning at Pike, told the paper that sales were down 35 percent this year and that the problems started during the normally busy spring selling season, "We had a late freeze at Easter, which started the spiral. We got back on track by the summer, and then the water restrictions started," Juers said. "I've been with Pike for 30 years, and Atlanta has never had a total water ban. That really changed the dynamics — consumers stopped shopping."
In spite of attempts to cut expenses, the nursery chain was forced to declare bankruptcy. Juers is quoted in the AJC as saying that the bankruptcy filling will give the business an opportunity to freeze the debt and get a needed break from the effects of the drought.
"We've got nine months to come up with a restructuring plan, and we want to come out of it smarter and hopefully learn from it…We're looking at it as a strategic business move to protect our employees so they're not out at this time of the year looking for employment."
The nursery chain, which promoted a family-run business, was fully owned by the Pike family until 2004, when private-equity firm Roark Capital Group bought a majority stake.
For more information, visit www.pikenursery.com.