After recently closing more than a dozen stores, pool equipment retailer Namco announced that it expects to emerge from Chapter 11 bankruptcy.
The Manchester, Conn.-based company negotiated a restructuring plan with creditors and has secured a $10 million loan to exit bankruptcy, and another $3 million in new capital from private investors. The plan will allow Namco to focus on future growth in its core Northeastern markets, a press release stated.
As part of its restructuring plan, Namco, a large seller of aboveground pools, closed 14 locations across Delaware, Maryland, New Jersey and Pennsylvania. Some of these stores operated under the company’s Branch Brooks brand.
Competitors now are anticipating more customers. Knowing Branch Brooks was going out of business, Bob Enright of New Jersey’s Olympia Pools, stocked up on inventory. He said more people are discovering his store, but they expect lower prices. “I have to explain to them: ‘Look, that was a big box store,’ ” Enright said.
As former Namco patrons turn to new sources for their pool supplies, they’re struggling to find products not widely available. Hot on their lists are parts compatible with Proline filters and pumps. Proline is a private-label brand sold by Namco.
“They’re thinking, ‘OK, Namco’s out of business. I’ll just go to another pool store and they’ll have what I need.’ They’re finding that’s not the case,” said Debbi Leclerc, co-owner of The Pool Doctor of Rhode Island, another state Namco exited earlier this year.
Leclerc also reported that she’s been approached by several people offering to sell her pallets of products salvaged from Namco closures. “That was something we weren’t expecting,” she said.
While some companies anticipate a boost, at least one is bracing for a slowdown. Dig-M-Installers installs about 1,200 above-ground pools annually. This year, the Levittown, Pa.-based firm will do about half that, estimated Maria Rooney. She and husband Tucker Rooney have been in business since 1979 as a preferred installer for several Namco stores. Fortunately, they can mine their database of 51,000 clients for work. “We’ve got customers who’ll need new pools, change their liners and need repairs,” she said.
Still, she said Namco could have at least given them a courtesy notice about closing. “I hope some small companies will open back up,” Tucker said. “It sure would be nice to work with some mom-and-pop stores.”
Namco’s restructuring comes at a time when pool supply retailers are expected to capitalize on an improving economy. Market research firm IBISWorld estimates the pool industry’s retail sector will see 2 percent annual growth over the next five years.
Namco filed for Chapter 11 bankruptcy protection in March, citing internal management issues and a sluggish economy for its inability to pay debts totaling approximately $30 million. The firm saw net sales drop about $10 million in 2011-2012 and began scaling back. It still operates 19 stores in five states.
