Ernst Home Centers, Inc. was a chain of
home improvement
The concept of home improvement, home renovation, or remodeling is the process of renovating or making additions to one's home. Home improvement can consist of projects that upgrade an existing home interior (such as electrical and plumbing), ...
retail stores founded in
Seattle
Seattle ( ) is a seaport city on the West Coast of the United States. It is the seat of King County, Washington. With a 2020 population of 737,015, it is the largest city in both the state of Washington and the Pacific Northwest regio ...
, Washington,
United States
The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territori ...
. Ernst was started in 1893 by Seattle brothers Charles and Fred Ernst and in 1960 became a division of
Pay 'n Save, one of the largest retail companies in the
Northwest. After a 1984 takeover of Pay 'n Save, Ernst was sold off and went
public
In public relations and communication science, publics are groups of individual people, and the public (a.k.a. the general public) is the totality of such groupings. This is a different concept to the sociological concept of the ''Öffentlichk ...
in 1994. Following several highly publicized lawsuits and a failed attempt to open larger stores, the company filed for
Chapter 11
Chapter 11 of the United States Bankruptcy Code (Title 11 of the United States Code) permits reorganization under the bankruptcy laws of the United States. Such reorganization, known as Chapter 11 bankruptcy, is available to every business, wheth ...
bankruptcy in 1996 and liquidated in early 1997. At the company's peak, it operated 95 stores in 12 western U.S. states.
[
]
History
Founding
In 1893, brothers Charles and Fred Ernst started Ernst Hardware in Seattle
Seattle ( ) is a seaport city on the West Coast of the United States. It is the seat of King County, Washington. With a 2020 population of 737,015, it is the largest city in both the state of Washington and the Pacific Northwest regio ...
, Washington
Washington commonly refers to:
* Washington (state), United States
* Washington, D.C., the capital of the United States
** A metonym for the federal government of the United States
** Washington metropolitan area, the metropolitan area centered o ...
.[ In 1907, the new company was incorporated as Ernst Hardware and Plumbing Co. and moved to 512 Pike Street in downtown Seattle.
During the 1950s, M. Lamont Bean, president of Seattle-based drugstore chain Pay 'n Save, expressed the possibility of operating non-drugstore businesses.] Bean later took interest in Ernst and, in February 1960, came to an agreement with Fred Ernst to buy his nine hardware stores.[ Two years later, Pay 'n Save acquired Malmo Nursery and began opening Ernst-Malmo combination stores; combining hardware, lumber, garden supplies, and nursery items in one building.][
]
Trump Group
In September 1984, The Trump Group, led by New York investors Julius and Edmond Trump (who are not related to Donald Trump) attempted to acquire Pay 'n Save for $355 million. Pay 'n Save's largest shareholders, Stuart Sloan and Samuel N. Stroum, vowed to fight the sale of the retail company.[ On September 12, 1984, The Trump Group announced that it had withdrawn its offer to purchase Ernst's parent company in order to negotiate with Sloan and Stroum. On October 15, 1984, Pay 'n Save was officially sold to the Trumps for $358 million.] The future of Ernst was put at risk in May 1985 when Pay 'n Save announced plans to sell off all of its subsidiaries. On November 8, 1985, Pay 'n Save's drugstore chain became controlled by a company equally owned by the Trump Group and a partnership headed by William Zimmerman, owner of California discount chain Pic 'N' Save
Pic 'N' Save Corporation (later MacFrugals) was at one time the second-largest closeout retail chain in the United States. Financial troubles caused the chain to close many stores in the late 1990s and early 2000s.
History
William Zimmerman fou ...
. The sale left Pay 'n Save with 69 Ernst stores, three Yard Birds stores and wholesaler Northwestern Drug Co.[ In January 1986, Pay 'n Save was renamed Seattle Standard Corp. In March 1986, Hal Smith, former president of ]Irvine, California
Irvine () is a master-planned city in South Orange County, California, United States, in the Los Angeles metropolitan area. The Irvine Company started developing the area in the 1960s and the city was formally incorporated on December 28, 197 ...
-based Builders Emporium, succeeded Mike Rouleau as president and CEO of Ernst.
In 1987 and 1988, Ernst remodeled and upgraded all of its stores and, in late 1990, tested a new concept store in West Seattle
West Seattle is a conglomeration of neighborhoods in Seattle, Washington, United States. It comprises two of the thirteen districts, Delridge and Southwest, and encompasses all of Seattle west of the Duwamish River. It was incorporated as an i ...
. The new concept featured garden-like nurseries, an espresso cart, wider aisles, expanded merchandise, brighter signs and other modern amenities. Ernst opened two more of the new concept stores in Lynnwood, Washington
Lynnwood is a city in Snohomish County, Washington, United States. The city is part of the Seattle metropolitan area and is located north of Seattle and south of Everett, near the junction of Interstate 5 and Interstate 405. It is the f ...
and Spokane, Washington
Spokane ( ) is the largest city and county seat of Spokane County, Washington, United States. It is in eastern Washington, along the Spokane River, adjacent to the Selkirk Mountains, and west of the Rocky Mountain foothills, south of the Cana ...
in 1991.
Early 1990s lawsuits
In April 1992, Ernst filed a lawsuit against retailer Wal-Mart
Walmart Inc. (; formerly Wal-Mart Stores, Inc.) is an American multinational retail corporation that operates a chain of hypermarkets (also called supercenters), discount department stores, and grocery stores from the United States, headquarter ...
claiming the discount chain stole Ernst's registered advertising slogan ("Always the right price. Always."). Ernst asked the court to force Wal-Mart to stop using their slogan and pay unspecified damages to the retailer.
Three months later, Ernst sued another retailer, Seattle-based home improvement chain Eagle Hardware & Garden, for unfair competition and violation of the state's Consumer Protection Act. The company claimed Eagle's comparisons of prices for various products were false and deceptive. Eagle, in turn, accused Ernst of also misleading consumers with its advertising and defamation for suing Eagle just before the newly formed company went public.
At the same time of the Eagle suit, Ernst went after Pay 'n Save, accusing it of illegal competition for selling nursery products in 15 Washington shopping centers the two retailers operated in. Ernst had contracts with the owners of the 15 shopping centers to be the primary or exclusive seller of nursery products in them. PayLess Drug Stores, who had then-recently acquired Pay 'n Save, hit the chain with a counterclaim, which accused Ernst of selling camera film and film-processing services at eight shopping centers where PayLess had the sole right to sell those services.[
Shortly after the suits against the three retailers, the state of Washington sued Ernst on charges that it failed to objectively portray prices at competitors ]Pay 'n Pak
Pay 'n Pak was a home improvement chain that was based out of Kent, Washington. Pay 'n Pak began in 1962 and was founded by Stan Thurman, an electric and plumbing supply retailer from Longview, Washington. In 1969, Pay 'n Pak merged with Eagle E ...
and Home Club in a 1990 advertising campaign. In a settlement made in October 1992, Ernst admitted no wrongdoing but agreed to pay $19,500 in court costs, consumer education and to enforce the Consumer Protection Act.[
In November 1992, Ernst filed a lawsuit against ]United Food and Commercial Workers
The United Food and Commercial Workers International Union (UFCW) is a labor union representing approximately 1.3 million workers in the United States and Canada in industries including retail; meatpacking, food processing and manufacturing; hosp ...
Local 1001 following several months of union complaints against the retail chain. Union complaints about off-the-clock work and unlawful pay practices prompted the chain to file the lawsuit alleging defamation and consumer protection violations by the union and its legal counsel.[ In March 1993, the union filed a ]class-action lawsuit
A class action, also known as a class-action lawsuit, class suit, or representative action, is a type of lawsuit where one of the parties is a group of people who are represented collectively by a member or members of that group. The class actio ...
against Ernst, charging the retailer with failing to pay employees for work done on their own time.[ The union, representing 450 of Ernst's Seattle area employees, had been boycotting the hardware chain since November 1992 when their contract expired on November 1.][ The union sued Ernst again in August 1993 for knowingly selling toilets that violate state water conservation requirements. Ernst later announced it would stop selling the specific toilets.
]
Decline
In June 1994, Ernst announced plans to go public and to raise $50 million through a stock sale to open 55 superstores over the next three years. The company began opening the superstores, averaged at , in 1991.[ At the time, Ernst was operating 77 stores in eight U.S. states.][ Ernst later delayed their initial stock offering, but later resumed their offering and went public in September 1994.
In January 1996, Ernst reported a $47.6 million loss in its fourth-quarter, nearly twice what the retailer made in the past four years. At the same time, Ernst announced the cancellation of plans for 13 new stores and the closure of nine stores.] On July 12, 1996, Ernst filed for Chapter 11 bankruptcy and announced the closure of 25 stores. The filing came after Ernst reported a loss of nearly $116 million in the company's past three quarters.[ On November 12, despite the chain's attempt to remain in business, Ernst announced it would close its remaining 53 stores and sell off the remainder of its operations.] At the time, Ernst was operating 53 stores in six U.S. states and had about 2,000 full and part-time employees. Ernst began its final going-out-of-business sale on November 23.
Malmo Nursery
Charles Malmo, an immigrant from Norway
Norway, officially the Kingdom of Norway, is a Nordic country in Northern Europe, the mainland territory of which comprises the western and northernmost portion of the Scandinavian Peninsula. The remote Arctic island of Jan Mayen and the ...
, founded a seed store on Second Avenue in Seattle in 1893. Malmo was credited with being first in the Northwest to propagate and grow his own nursery stock rather than import ornamental shrubs from Japan, the Netherlands
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, subdivision_type = Sovereign state
, subdivision_name = Kingdom of the Netherlands
, established_title = Before independence
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and England
England is a country that is part of the United Kingdom. It shares land borders with Wales to its west and Scotland to its north. The Irish Sea lies northwest and the Celtic Sea to the southwest. It is separated from continental Europe b ...
. In 1930, he opened the first "garden department store
A department store is a retail establishment offering a wide range of consumer goods in different areas of the store, each area ("department") specializing in a product category. In modern major cities, the department store made a dramatic app ...
" on the Pacific Coast, selling all that was needed for the "most elaborate garden, from seeds to large trees," as he humbly asserted during the opening festivities. His son Clark bought to cultivate at the present site of University Village University Village may mean:
* University Village, Albany, California
*University Village, Chicago, Illinois
*University Village, Grand Forks, North Dakota
* University Village, New York
* University Village, Riverside, California
*University Villa ...
shopping mall. Many of the mature yards surrounding old Laurelhurst homes in Seattle today were the work of the Malmos. In 1962, the Malmos sold their business to Ernst Hardware and Pay 'n Save stores and became a wholly owned subsidiary.
References
{{Reflist, 2
Pay 'n Save
Defunct retail companies of the United States
Defunct companies based in Seattle
Retail companies established in 1893
Companies that filed for Chapter 11 bankruptcy in 1996
Retail companies disestablished in 1997
Home improvement retailers of the United States
1893 establishments in Washington (state)
1997 disestablishments in Washington (state)