Rickel
Encyclopedia
Rickel was a home improvement store chain based in northern New Jersey
. The Rickels' first store opened in 1953 and for three decades Rickel was the leading hardware, plumbing, heating and electrical retailer in its region. At its peak Rickel operated over 90 stores, but competition from Home Depot and money problems resulting from both a merger with Channel Home Centers
and debt problems with its former parent led to a 1996 bankruptcy filing and eventually the closure of the entire Rickel chain in 1997.
. An anecdotal story says that a few years later, the brothers purchased a warehouse full of plumbing supplies for "next to nothing". Since the Rickel brothers were in the heating business and not the plumbing business, and therefore unfamiliar with what they purchased, they sought help to figure out what to do with it. A friend contacted another friend, Summit, New Jersey plumber Bill Ryan, who inventoried the stock, sorted, and priced it.
After Ryan was done pricing the supplies, the brothers quickly realized that it would take years to sell the supplies to local plumbers wholesale. Instead, they came up with an idea to sell them at retail cost to the general public. They also thought that if they hired Ryan to work for them, he could not only sell the supplies to the people but also explain what they needed to do in order to fix their own toilets, sinks, drains, and other plumbing needs, as well as ensuring that the customer bought the correct parts needed to perform the repair. So, in 1953 Al, Mort, and Bob opened up the first Rickel Brothers store in Union, New Jersey
, and Ryan was warmly referred to as "employee number one" for his entire 35 year stint with the Rickel store chain. Rickel was one of the first "do-it-yourself" home improvement stores, expanding beyond plumbing supplies and selling heating and electrical supplies and tools in addition.. An early slogan and jingle of the Rickel chain, which lasted in some degree to its 1997 closure, was "Rickel Helps You Do it Better- Do it Better With Rickel"- a reflection of the Rickel brothers' focus.
, Paramus
, East Brunswick
, and a new location in Union. By 1967 the "Rickel Supermarts" chain (as the stores were now known) had six stores, all in New Jersey, opening in Menlo Park
and Wayne
. The Rickels then began expanding at a more rapid pace, opening more stores in New Jersey and entering the New York
and Pennsylvania
markets for the first time. During this time a corporate headquarters was established in South Plainfield, New Jersey
, which also served as Rickel's primary distribution center.
The Rickel brothers sold the still-growing chain of Rickel Supermarts to Supermarkets General Corporation
, the parent company of the Pathmark supermarket chain, in 1969. After the sale SGC renamed the chain "Rickel Home Centers", which lasted until Rickel's closure. In 1975, the Rickel division of SGC recorded $80 million in sales and was the dominant home improvement retailer in the region, far outselling its larger competitors Channel Lumber
and Pergament
. The subsequent decade was a time of continued expansion as the Rickel chain grew to over 30 stores by the mid-eighties.
However, Supermarkets General's fortunes were starting to turn. While Rickel was doing well, its corporate sibling Pathmark was losing business and dragging the company's finances down with it. In 1987, the Dart Group
made a hostile takeover bid to acquire SGC. In a move to avoid the takeover, management took the company private by engineering a $2.1 billion leveraged buyout. Merrill Lynch
Capital Markets Inc. received 55 percent of the shares, Equitable Life Assurance received 30 percent and SGC management retained ten percent. The company's debt grew to $1.6 billion by early 1990, half of it in junk bonds, primarily as a result of the buyout. Servicing the debt became SGC's primary objective and largest problem.
-based home improvement chain Home Depot began to open stores in the New York/New Jersey metropolitan area. Although Rickel, Channel, Pergament, and local hardware stores all felt the effects of Home Depot's entry and quick expansion into their market area, Rickel was perhaps affected the most due to the cash flow problems at Supermarkets General.
Home Depot and Rickel's spat also nearly led to the cancellation of a long-running home repair television program. In 1989, This Old House
host Bob Vila
was signed by Rickel to endorse its stores. This angered Home Depot, who was one of This Old House's largest underwriters, as they did not want to fund a program where one of the participants endorsed a competing business. Home Depot, along with its lumber supplier Weyerhaeuser
, pulled underwriting from This Old House. WGBH-TV
, the PBS station that produced This Old House, responded by firing Vila and ending his ten year run as host of the program. Vila later became famous as a pitchman for Sears and Craftsman Tools
.
Combined with Home Depot's expansion and its parent company's debt problems, not only did Rickel find itself unable to compete with the rapidly growing Home Depot, but it also began to lose market share to its local competitors who were on more secure financial footing. By fall 1993 it became apparent that Rickel's future was beginning to look grim. Supermarkets General's debt problems had continued to mount while Pathmark was continuing to lose business, and as such the already flagging Rickel was unable to receive enough capital from its parent to keep pace with the still-expanding Home Depot. Supermarkets General decided to reorganize its businesses and focus solely on Pathmark, changing its name to Pathmark Stores, Inc. and spinning off Rickel. On August 26, 1994, Pathmark announced the selling of Rickel to Eos Partners L.P., an investment group based in New York City. On the same day, Eos Partners bought a controlling stake in the Channel chain, which was larger than Rickel (operating 60 stores to Rickel's 33) from GE Capital
and announced that Rickel and Channel would merge operations, with Rickel adding 59 stores to its nameplate. The only Channel store Rickel did not keep open was Channel's largest store, their Totowa, New Jersey location; Rickel had opened a store very near that Channel store in the late 1980s and decided, since they were already there, to keep that store open. This was Rickel's first large wave of expansion since the 1960s and the chain's overall largest, as Rickel's locations nearly tripled and it had opened stores in many new cities and towns it had not served before. After the merger was finalized Rickel temporarily rebranded itself as "The New Rickel" and added the slogan "Bringing it all closer to home" to reflect its new acquisitions, which brought its store count to 92.
Despite the expansion Rickel's already tense situation was not improving and instead only got worse. The ongoing spat with Home Depot finally came to a head in July 1995, when Rickel was sued by Home Depot in a New Jersey state court over a spat regarding Rickel's opposition to Home Depot building a store in Bloomfield, New Jersey
. At the time, Rickel was operating a store on Bloomfield Avenue in lower Bloomfield while Home Depot was looking to build a store approximately one mile away on Orange Street. This was in close enough proximity to Rickel's longstanding store that the two chains would be battling directly for business in the surrounding area. Due to that, Home Depot said that Rickel was behind a "smear campaign" aimed at stalling the Atlanta-based chain's continued expansion into the New Jersey-based chain's market, and specifically cited a claim by Rickel that a Home Depot store that opened in Clifton, New Jersey
in 1992 was responsible for a large increase in car thefts and crime in Clifton. Home Depot said that Rickel, who had operated a store in Bloomfield for quite some time at that point and would be competing directly with the much-larger Home Depot store for business, distributed that information while posing as a community group opposed to the construction of the new store (which remains open to this day). It perhaps should be noted that Rickel and Home Depot had operated stores in the same towns before- including Clifton, where Home Depot had been entrenched for two years prior to Rickel's entry into the city with the Channel merger- but were far enough away from each other so as not to cause a large of a problem.
In addition to the damage the lawsuit may have caused to Rickel's image, it quickly became clear after the merger with Channel that Rickel had far overextended its tenuous financial state.As 1995 ended Rickel began what would be the first of several rounds of store closures, as thirteen stores were shuttered. On January 10, 1996, nearly seventeen months after the merger with Channel, Rickel filed for Chapter 11 bankruptcy protection and began another round of store closings shortly thereafter. Another thirteen stores were closed by July, leaving the chain with 66. The chain's reduction, however, did not fully help matters. Although Rickel was starting to show signs of recovery that met with positive reactions, the financial state of the chain was still in shambles. A third round of closings extended into early 1997, as Rickel closed thirteen more underperforming stores and left itself with 53. Four more stores were closed as the year progressed, dropping the total to 49.
In 1997 Rickel decided to shift focus again and focus less on being a direct competitor to Home Depot, which had now established itself as the New York area market leader in retail home improvement. Instead, Rickel decided to focus on things that made it unique compared to the larger, big-box chain. Although Rickel was one of the larger and more successful home improvement chains in the area prior to Home Depot's entry into its market-and even after its merger with Channel- Rickel tended to operate in smaller facilities than Home Depot did. For example, a typical Home Depot store was well over 100000 square feet (9,290.3 m²) in size, while Rickel typically did business in stores that were 40000 square feet (3,716.1 m²) or less.
Rickel decided, as they had tried once before, to use their size to their advantage and define themselves as more of a neighborhood home center. Since the smaller Rickel stores sold most of the same items as the warehouse-sized Home Depots, Rickel pushed themselves as a place where you could get what you were looking for easily without having to go through hassles at Home Depot. The attempt did little, if anything, to put a dent in sales for Home Depot and a still-in-bankruptcy Rickel's demise, which the company had tried its best to avoid, now appeared imminent.
After a last attempt in August to try and keep the stores open at least until the following February, on October 11, 1997, Rickel's vice president for marketing announced that the chain "ran out of cash" and would liquidate. Going out of business sales continued for most of the next two months. Most of the Rickels closed by Thanksgiving 1997, but several continued to remain open as late as mid-December as merchandise was shuffled around to stores that hadn't closed. The final Rickel store to close was the Wayne, New Jersey store, which finally closed in early 1998. Later that year, office supply store chain Staples purchased leases at 41 of Rickel's 53 shuttered stores. However, Staples only occupied 35 of those stores and handed the leases back to the remnants of the chain and its real estate developer.
Al Rickel, one of the three original brothers, died on January 15, 2008, at age 90.
New Jersey
New Jersey is a state in the Northeastern and Middle Atlantic regions of the United States. , its population was 8,791,894. It is bordered on the north and east by the state of New York, on the southeast and south by the Atlantic Ocean, on the west by Pennsylvania and on the southwest by Delaware...
. The Rickels' first store opened in 1953 and for three decades Rickel was the leading hardware, plumbing, heating and electrical retailer in its region. At its peak Rickel operated over 90 stores, but competition from Home Depot and money problems resulting from both a merger with Channel Home Centers
Channel Home Centers
Channel Home Centers was a chain of home improvement retail stores that was based in Whippany, New Jersey. The chain of stores was founded in 1948 but could trace its history as far back as 1922 or 1908, when the original lumber company that preceded it was founded...
and debt problems with its former parent led to a 1996 bankruptcy filing and eventually the closure of the entire Rickel chain in 1997.
Founding
The origins of the company date back to 1946 when brothers and heating contractors Al, Mort, and Bob Rickel went into business for themselves in Newark, New JerseyNewark, New Jersey
Newark is the largest city in the American state of New Jersey, and the seat of Essex County. As of the 2010 United States Census, Newark had a population of 277,140, maintaining its status as the largest municipality in New Jersey. It is the 68th largest city in the U.S...
. An anecdotal story says that a few years later, the brothers purchased a warehouse full of plumbing supplies for "next to nothing". Since the Rickel brothers were in the heating business and not the plumbing business, and therefore unfamiliar with what they purchased, they sought help to figure out what to do with it. A friend contacted another friend, Summit, New Jersey plumber Bill Ryan, who inventoried the stock, sorted, and priced it.
After Ryan was done pricing the supplies, the brothers quickly realized that it would take years to sell the supplies to local plumbers wholesale. Instead, they came up with an idea to sell them at retail cost to the general public. They also thought that if they hired Ryan to work for them, he could not only sell the supplies to the people but also explain what they needed to do in order to fix their own toilets, sinks, drains, and other plumbing needs, as well as ensuring that the customer bought the correct parts needed to perform the repair. So, in 1953 Al, Mort, and Bob opened up the first Rickel Brothers store in Union, New Jersey
Union Township, Union County, New Jersey
Union is a Township in Union County, New Jersey, United States. In the 18th century, the area that is now Union was then called Connecticut Farms...
, and Ryan was warmly referred to as "employee number one" for his entire 35 year stint with the Rickel store chain. Rickel was one of the first "do-it-yourself" home improvement stores, expanding beyond plumbing supplies and selling heating and electrical supplies and tools in addition.. An early slogan and jingle of the Rickel chain, which lasted in some degree to its 1997 closure, was "Rickel Helps You Do it Better- Do it Better With Rickel"- a reflection of the Rickel brothers' focus.
Growth
The Rickels began expanding quickly after their first store became a success and by the early 1960s were operating three locations, all in New Jersey: SuccasunnaSuccasunna-Kenvil, New Jersey
Succasunna-Kenvil is a census-designated place and unincorporated area located within Roxbury Township, in Morris County, New Jersey. As of the United States 2000 Census, the CDP population was 12,569.-History:...
, Paramus
Paramus, New Jersey
Paramus is a borough in Bergen County, New Jersey, United States. As of the 2010 United States Census, the borough population was 26,342. A suburb of New York City, Paramus is located between 15–20 miles northwest of Midtown Manhattan and approximately west of Upper Manhattan.Paramus is one of...
, East Brunswick
East Brunswick Township, New Jersey
The town is located southwest of New York City and 48 miles northeast of Philadelphia.Lawrence Brook, a tributary of the Raritan River, runs along the western border of the township...
, and a new location in Union. By 1967 the "Rickel Supermarts" chain (as the stores were now known) had six stores, all in New Jersey, opening in Menlo Park
Edison, New Jersey
Edison Township is a township in Middlesex County, New Jersey. What is now Edison Township was originally incorporated as Raritan Township by an Act of the New Jersey Legislature on March 17, 1870, from portions of both Piscataway Township and Woodbridge Township...
and Wayne
Wayne, New Jersey
Wayne is a Township in Passaic County, New Jersey, United States, located less than from midtown Manhattan. As of the United States 2000 Census, the township had a total population of 54,069....
. The Rickels then began expanding at a more rapid pace, opening more stores in New Jersey and entering the New York
New York
New York is a state in the Northeastern region of the United States. It is the nation's third most populous state. New York is bordered by New Jersey and Pennsylvania to the south, and by Connecticut, Massachusetts and Vermont to the east...
and Pennsylvania
Pennsylvania
The Commonwealth of Pennsylvania is a U.S. state that is located in the Northeastern and Mid-Atlantic regions of the United States. The state borders Delaware and Maryland to the south, West Virginia to the southwest, Ohio to the west, New York and Ontario, Canada, to the north, and New Jersey to...
markets for the first time. During this time a corporate headquarters was established in South Plainfield, New Jersey
South Plainfield, New Jersey
South Plainfield is a Borough in Middlesex County, New Jersey, United States. As of the 2010 United States Census, the borough population was 23,385....
, which also served as Rickel's primary distribution center.
Pathmark
Pathmark is a supermarket chain headquartered in Montvale, New Jersey. It was founded in 1968 when its then parent, Supermarkets General Corporation, pulled out of the ShopRite retailers' cooperative...
, the parent company of the Pathmark supermarket chain, in 1969. After the sale SGC renamed the chain "Rickel Home Centers", which lasted until Rickel's closure. In 1975, the Rickel division of SGC recorded $80 million in sales and was the dominant home improvement retailer in the region, far outselling its larger competitors Channel Lumber
Channel Home Centers
Channel Home Centers was a chain of home improvement retail stores that was based in Whippany, New Jersey. The chain of stores was founded in 1948 but could trace its history as far back as 1922 or 1908, when the original lumber company that preceded it was founded...
and Pergament
Pergament Home Centers
Pergament Home Centers is a former home improvement store chain in the New York tri-state area, with a heavy concentration of stores in New York and a few stores in New Jersey and Connecticut. They were home improvement stores similar to Rickel, which had a fairly diverse range of products...
. The subsequent decade was a time of continued expansion as the Rickel chain grew to over 30 stores by the mid-eighties.
However, Supermarkets General's fortunes were starting to turn. While Rickel was doing well, its corporate sibling Pathmark was losing business and dragging the company's finances down with it. In 1987, the Dart Group
Dart Drug
Dart Drug is a now-defunct chain of discount drug stores in the metropolitan Washington, DC region. It was founded in 1955, by Herbert Haft and his wife Gloria in Adams Morgan. The chain expanded to over 100 stores, and became a vehicle by which Herbert Haft engaged in greenmail activities against...
made a hostile takeover bid to acquire SGC. In a move to avoid the takeover, management took the company private by engineering a $2.1 billion leveraged buyout. Merrill Lynch
Merrill Lynch
Merrill Lynch is the wealth management division of Bank of America. With over 15,000 financial advisors and $2.2 trillion in client assets it is the world's largest brokerage. Formerly known as Merrill Lynch & Co., Inc., prior to 2009 the firm was publicly owned and traded on the New York...
Capital Markets Inc. received 55 percent of the shares, Equitable Life Assurance received 30 percent and SGC management retained ten percent. The company's debt grew to $1.6 billion by early 1990, half of it in junk bonds, primarily as a result of the buyout. Servicing the debt became SGC's primary objective and largest problem.
Competition and Bankruptcy
Around the time of Supermarkets General's cash flow problems, the Atlanta, GeorgiaAtlanta, Georgia
Atlanta is the capital and most populous city in the U.S. state of Georgia. According to the 2010 census, Atlanta's population is 420,003. Atlanta is the cultural and economic center of the Atlanta metropolitan area, which is home to 5,268,860 people and is the ninth largest metropolitan area in...
-based home improvement chain Home Depot began to open stores in the New York/New Jersey metropolitan area. Although Rickel, Channel, Pergament, and local hardware stores all felt the effects of Home Depot's entry and quick expansion into their market area, Rickel was perhaps affected the most due to the cash flow problems at Supermarkets General.
Home Depot and Rickel's spat also nearly led to the cancellation of a long-running home repair television program. In 1989, This Old House
This Old House
This Old House is an American home improvement magazine and television series aired on the American television station Public Broadcasting Service which follows remodeling projects of houses over a number of weeks.-Overview:...
host Bob Vila
Bob Vila
Robert Joseph "Bob" Vila is an American home improvement television show host known for This Old House , Bob Vila's Home Again , and Bob Vila .-Early life:...
was signed by Rickel to endorse its stores. This angered Home Depot, who was one of This Old House's largest underwriters, as they did not want to fund a program where one of the participants endorsed a competing business. Home Depot, along with its lumber supplier Weyerhaeuser
Weyerhaeuser
Weyerhaeuser is one of the largest pulp and paper companies in the world. It is the world's largest private sector owner of softwood timberland; and the second largest owner of United States timberland, behind Plum Creek Timber...
, pulled underwriting from This Old House. WGBH-TV
WGBH-TV
WGBH-TV, channel 2, is a non-commercial educational public television station located in Boston, Massachusetts, USA. WGBH-TV is a member station of the Public Broadcasting Service , and produces more than two-thirds of PBS's national prime time television programming...
, the PBS station that produced This Old House, responded by firing Vila and ending his ten year run as host of the program. Vila later became famous as a pitchman for Sears and Craftsman Tools
Craftsman (tools)
Craftsman is a line of tools and lawn and garden equipment controlled by Sears Holdings Corporation; the brand is owned by KCD IP, LLC, a special purpose entity created by Sears Holdings for securitization purposes....
.
Combined with Home Depot's expansion and its parent company's debt problems, not only did Rickel find itself unable to compete with the rapidly growing Home Depot, but it also began to lose market share to its local competitors who were on more secure financial footing. By fall 1993 it became apparent that Rickel's future was beginning to look grim. Supermarkets General's debt problems had continued to mount while Pathmark was continuing to lose business, and as such the already flagging Rickel was unable to receive enough capital from its parent to keep pace with the still-expanding Home Depot. Supermarkets General decided to reorganize its businesses and focus solely on Pathmark, changing its name to Pathmark Stores, Inc. and spinning off Rickel. On August 26, 1994, Pathmark announced the selling of Rickel to Eos Partners L.P., an investment group based in New York City. On the same day, Eos Partners bought a controlling stake in the Channel chain, which was larger than Rickel (operating 60 stores to Rickel's 33) from GE Capital
GE Capital
GE Capital is the financial services unit of General Electric, one of five major units. Its various divisions include GE Capital Aviation Services, GE Capital Real Estate, GE Energy Financial Services and GE Money....
and announced that Rickel and Channel would merge operations, with Rickel adding 59 stores to its nameplate. The only Channel store Rickel did not keep open was Channel's largest store, their Totowa, New Jersey location; Rickel had opened a store very near that Channel store in the late 1980s and decided, since they were already there, to keep that store open. This was Rickel's first large wave of expansion since the 1960s and the chain's overall largest, as Rickel's locations nearly tripled and it had opened stores in many new cities and towns it had not served before. After the merger was finalized Rickel temporarily rebranded itself as "The New Rickel" and added the slogan "Bringing it all closer to home" to reflect its new acquisitions, which brought its store count to 92.
Despite the expansion Rickel's already tense situation was not improving and instead only got worse. The ongoing spat with Home Depot finally came to a head in July 1995, when Rickel was sued by Home Depot in a New Jersey state court over a spat regarding Rickel's opposition to Home Depot building a store in Bloomfield, New Jersey
Bloomfield, New Jersey
Bloomfield is a township in Essex County, New Jersey, United States. As of the 2010 United States Census, the township population was 47,315. It surrounds the Bloomfield Green Historic District.-History:...
. At the time, Rickel was operating a store on Bloomfield Avenue in lower Bloomfield while Home Depot was looking to build a store approximately one mile away on Orange Street. This was in close enough proximity to Rickel's longstanding store that the two chains would be battling directly for business in the surrounding area. Due to that, Home Depot said that Rickel was behind a "smear campaign" aimed at stalling the Atlanta-based chain's continued expansion into the New Jersey-based chain's market, and specifically cited a claim by Rickel that a Home Depot store that opened in Clifton, New Jersey
Clifton, New Jersey
Clifton is a city in Passaic County, New Jersey, United States. As of the 2010 United States Census, the city had a total population of 84,136. The 2010 population represented an increase of 5,464 residents from its population of 78,672 in the 2000 Census, making it the state's 11th largest...
in 1992 was responsible for a large increase in car thefts and crime in Clifton. Home Depot said that Rickel, who had operated a store in Bloomfield for quite some time at that point and would be competing directly with the much-larger Home Depot store for business, distributed that information while posing as a community group opposed to the construction of the new store (which remains open to this day). It perhaps should be noted that Rickel and Home Depot had operated stores in the same towns before- including Clifton, where Home Depot had been entrenched for two years prior to Rickel's entry into the city with the Channel merger- but were far enough away from each other so as not to cause a large of a problem.
In addition to the damage the lawsuit may have caused to Rickel's image, it quickly became clear after the merger with Channel that Rickel had far overextended its tenuous financial state.As 1995 ended Rickel began what would be the first of several rounds of store closures, as thirteen stores were shuttered. On January 10, 1996, nearly seventeen months after the merger with Channel, Rickel filed for Chapter 11 bankruptcy protection and began another round of store closings shortly thereafter. Another thirteen stores were closed by July, leaving the chain with 66. The chain's reduction, however, did not fully help matters. Although Rickel was starting to show signs of recovery that met with positive reactions, the financial state of the chain was still in shambles. A third round of closings extended into early 1997, as Rickel closed thirteen more underperforming stores and left itself with 53. Four more stores were closed as the year progressed, dropping the total to 49.
In 1997 Rickel decided to shift focus again and focus less on being a direct competitor to Home Depot, which had now established itself as the New York area market leader in retail home improvement. Instead, Rickel decided to focus on things that made it unique compared to the larger, big-box chain. Although Rickel was one of the larger and more successful home improvement chains in the area prior to Home Depot's entry into its market-and even after its merger with Channel- Rickel tended to operate in smaller facilities than Home Depot did. For example, a typical Home Depot store was well over 100000 square feet (9,290.3 m²) in size, while Rickel typically did business in stores that were 40000 square feet (3,716.1 m²) or less.
Rickel decided, as they had tried once before, to use their size to their advantage and define themselves as more of a neighborhood home center. Since the smaller Rickel stores sold most of the same items as the warehouse-sized Home Depots, Rickel pushed themselves as a place where you could get what you were looking for easily without having to go through hassles at Home Depot. The attempt did little, if anything, to put a dent in sales for Home Depot and a still-in-bankruptcy Rickel's demise, which the company had tried its best to avoid, now appeared imminent.
After a last attempt in August to try and keep the stores open at least until the following February, on October 11, 1997, Rickel's vice president for marketing announced that the chain "ran out of cash" and would liquidate. Going out of business sales continued for most of the next two months. Most of the Rickels closed by Thanksgiving 1997, but several continued to remain open as late as mid-December as merchandise was shuffled around to stores that hadn't closed. The final Rickel store to close was the Wayne, New Jersey store, which finally closed in early 1998. Later that year, office supply store chain Staples purchased leases at 41 of Rickel's 53 shuttered stores. However, Staples only occupied 35 of those stores and handed the leases back to the remnants of the chain and its real estate developer.
Al Rickel, one of the three original brothers, died on January 15, 2008, at age 90.