Treasure House -- Local Chain Survives Parent's Plight To Grow On Its Own

Seattle-based Treasure House Inc. has shed the dead foliage of its Tampa Bay-based parent, Silk Greenhouse Inc., and plans to, once again, grow on its own.

Treasure House - a party, hobby-and-craft, and silk-plant store - recently celebrated its grand opening in six Washington state locations. The stores, in Seattle, Tacoma, Kirkland, Lynnwood, Spokane and Bellingham, should look familiar to longtime residents.

The Treasure House retailing concept is a resurrection of a past local success story, says B.B. Tuley, president.

The chain was started in the Seattle area in 1979. Over the next nine years, Treasure House's five locations posted sales of about $12 million.

Treasure House faltered shortly after it was acquired, in 1988, by Silk Greenhouse, a national retailer. At that time, the Treasure House name was changed to Silk Greenhouse, and the merchandise was narrowed to mostly silk plants, Tuley says.

Silk Greenhouse, which was started in 1982 and went public in 1988, was a fast-growing darling of Wall Street when it bought Treasure House.

However trouble began to surface the next year, and the problems grew increasingly onerous. By 1991 the company reported an astronomical $106 million loss on sales of $117.5 million.

During the chain's decline, Silk Greenhouse investors watched their stock fall from $24.25 per share to just 12.5 cents per share.

NationsBank, the retailer's primary lender, also saw its loan wilt. The bank was owed $60.5 million by Silk Greenhouse. It eventually received just an 18 percent return on its money after the company liquidated.

Tuley presided over the demise of the Tampa Bay chain.

He was brought in to save the troubled retailer in August 1990. Three months after taking the top job, Tuley put the chain into Chapter 11 bankruptcy. During the reorganization, he slashed the number of stores from 99 to just 26.

With those drastic cuts, Silk Greenhouse emerged from Chapter 11 a vastly slimmed-down version of itself.

Unfortunately, its lenders were not satisfied. The retailer could not secure sufficient operating capital for 1992, and the company was liquidated, Tuley says.

Treasure House survives, because management recognized a business opportunity in the six stores.

Tuley says the Washington stores were some of the most successful in the chain. "They were far enough away to not be contaminated by (Silk Greenhouses corporate) problems."

They also had maintained customer loyalty. Even after three years as Silk Greenhouse, some Washington customers still wrote their checks to Treasure House, he says.

Tuley, other former Silk Greenhouse managers and Marin County, Calif.-investor Marc Abramowitz and his family, bought the six local stores at what Tuley describes as a very good price.

According to a Tampa Bay Business Journal report, the deal was practically a steal. Legal documents indicate the group purchased all six stores for about $1.3 million. Silk Greenhouse originally acquired the Treasure House chain for $5.3 million. Tuley would not predict sales.

He plans to expand the Treasure House chain, but he will do it slowly. The investors are first concentrating on continued improvements in the merchandise mix, he says. Then the group will probably add Washington stores. Treasure House has no plans to go public, he says.