Overridden With Debt, Olsson's Ends Long Run
Wednesday, October 1, 2008
Yesterday morning, when Olsson's employees would normally have been turning on the lights and opening, the family-owned bookstores remained locked and dark, out of business.
The move appears to mark the end for one of the oldest independent booksellers in the Washington area, which had closed one of its six stores to reduce overhead and had been forced into bankruptcy protection this summer by creditors demanding payment of overdue bills.
On its Web site, the company said it has petitioned federal bankruptcy courts to change its bankruptcy status so that it may liquidate its assets.
"Although it is certainly a sad day for us, I can rejoice in all the great memories of my life in retail in Washington," said founder John Olsson, who began selling books and records in the District 50 years ago.
At its apex, Olsson's had nine stores. But the loss of music sales to big-box retailers and the Internet severely cut into its business, and the company had downsized over the past six years. It closed its Penn Quarter store in June, after Olsson said the rents and overhead became too expensive. Its five remaining stores were in Crystal City; Reagan National Airport; Arlington's Court House area; Old Town Alexandria and Dupont Circle, the oldest location.
Stephen Wallace-Haines, Olsson's general manager, said the company made the decision to close when it became clear that they would not make it through the end of the year, a time when bookstores would normally begin making their profit.
"In the end, all the roads towards reorganization led to this dead end: We did not have the money required to pay for product in advance, to collect reserves to buy for Christmas and satisfy the demands of rent and operational costs," Haines said in a statement. "We were losing money just by staying open."
Two of Olsson's biggest creditors, Random House and Penguin Group, as well as Hachette Book Group, called in its debts in June, petitioning the U.S. Bankruptcy Court in Greenbelt to place Olsson's in involuntary Chapter 7, which would force the company to liquidate. Two other creditors also hold claims on the company's book and music inventories.
Olsson's successfully asked the courts to convert that to Chapter 11, which protected it from creditors while it reorganized.
Alicia Greene, who had been Olsson's marketing manager for more than 20 years, said employees had been let go and others, including herself, had gone from full time to part time.
Over the summer, the merchandise had thinned in the stores; normally the staff would have been stocking up now for the holiday shopping season.
"The stores should really look full, to have a really nice presentation for the fall season," she said. "But you have to have credit to be able to buy inventory. That certainly had been our hope."