Denninghouse files for creditor protection

Dollar store owner Denninghouse seeks creditor shelter; stock marked down 49%: “TORONTO (CP) – Dollar store owner Denninghouse Inc.’s stock lost almost half its value Monday on news that it will close about 80 of its 93 corporate stores and is putting itself up for sale while restructuring under bankruptcy protection from creditors.”

Canadian Press writer Nancy Carr reports that Denninghouse has sought protection from creditors under the federal Companies’ Creditors Arrangement Act, which is Canada’s equivalent of filing for Chapter 11 of the U.S. Bankruptcy Code. For those not familiar with Denninghouse, it owns and operates 93 Buck or Two and Dollar Ou Deux stores across Canada. According to the article, it also has 220 franchise-owned stores, which it hopes to sell — presumably to the franchise owners.

Further, Denninghouse said it plans to close 80 of 93 corporate-owned stores and lay off between 480 and 600 jobs. Ouch! That will definitely hurt the job prospects of people in small and midsize communities, where its dollar stores are typically located. Families will be adversely affected, as well. So, let’s hope Denninghouse provides some sort of severance package to laid off and fired workers. It’s the least it can do, for the privilege of having much of its debt erased from its balance sheet by the bankruptcy court.

We have a Buck or Two store here. Although I’ve never been in it and don’t know if it’s franchise-run or corporate-owned, it seems to have some really neat products and is a good retail staple with stuff at rock bottom $1 and $2 prices.

In short, these types of events are never pretty and never fun. I hope Denninghouse is successful in selling as many Buck or Two and Dollar Ou Deux stores as it can, to minimize store closures and job losses.

Update: Thank you to all affected Denninghouse, Buck Or Two, and Dollar Ou Deux employees and franchise owners for their comments here. The response has remarkable. Having said that, new comments are now disabled.

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30 thoughts on “Denninghouse files for creditor protection

  1. Yes I would like to comment. All 93 stores are closing and the reference to hopefully having a good severence package does not exsist. Most stores will close in about 6 weeks while others may last 2-3. Many managers and staff have been with the company over 10 years with no severence because they are using the bankruptcy protection to their advantage. Look no further than the salaries and expenses of the new “American” upper level management and some very poor decisions (testing a concept before rolling it out into dozens of stores at the same time) as a major reason that all corporate stores will be closing. This in time will also affect some of the poorer operated franchise stores. Remember that they keep coming back to the poor results from the corporate stores. These were corporate stores because the original franchisees couldn’t make them profitable in most cases.

  2. Thank you for your comments. It is nice to hear the thoughts of a Denninghouse employee. If I might enquire, what was your position?

    As I said in my blog, I’m terribly sorry for these layoffs. “A Buck Or Two” has some great items we like to buy. Specifically, I think that the Dollar DVDs is a great concept and we’ve bought a few. As well, some products we like are private-label plastic containers and dog toys (we’re looking after an adorable Rottweiler puppy who goes through toys fairly fast).

    Do you know if the stores in Westbank and Kelowna (in British Columbia) were corporate- or franchise-owned? It will be sad if they go, too. Oh well, at least we still have “Your Dollar Store With More”, “MTF”, and “XS Cargo” as decent, discount stores.

    Cheers,
    Doug

  3. I agree the severence package for Buck or Two employees is a complete insult to the years of hard work, pride and dedication employees have given. The only failure relating to Buck or Two corporate stores is not with the employees who worked hard in these stores every day but with impulsive, untested decisions and insanely high wages of upper level management. It is a shame so few had to mess it up for so many. Good luck to all employees and their families.

  4. I agree the severence package for Buck or Two employees is a complete insult to the years of hard work, pride and dedication employees have given. The only failure relating to Buck or Two corporate stores is not with the employees who worked hard in these stores every day but with impulsive, untested decisions and insanely high wages of upper level management. It is a shame so few had to mess it up for so many. Good luck to all employees and their families.

  5. Back in the fall of 2003 I calculated the NPV of this entire firm. Regardless of the method used, the result was a negative NPV.

    Here is just one highlight:

    Avg. sales/sq-ft at Denninghouse: CAD 34.35
    Avg. sales/sq-ft at Family Dollar or Dollar General: >US$100

    Not to say that the “board” of this company approved nice “Dividends” to itself (look at who are the holders of the majority of this stock)… This is a text-book example of how to bankrupt a public company and not being held accountable for it!

    Well Done Mr. Dennis Klein!

  6. Hi Doug. The answer to your question is that 12 out of 34 stores are closing in B.C. alone. I don’t know much about stocks but its very interesting to see that denninghouse stocks have gone from .16 cents to .40 cents just over the weekend. Where is Martha???????

  7. In regards to the comment on the calculated NPV, someone should also take a look at the parade of ‘American’ executives who were hired by Dennis Klein since Sept /04 and the outrageous salaries, bonuses, moving and travelling expenses, and stock guarantees they were contracted for only 8 months before bankruptcy. The congratulations should not only go to Dennis Klein but also to Gregg Treadway. I guess alot was learned from K-Mart.

  8. I, as a former Buck or Two corporate store manager agree that the blame should be on Gregg Treadway. We were asked to roll out a new program to prepare for the introduction of plan-o-grams in all stores and then gears were shifted again and in 3 days were had to prepare to become a “great 88” (everything in the store would be 88 cents. This man and his “high level” management team simply did not know what they wanted-they changed thoughts and ideas about the direction that the company was going faster than I change my socks. This was a poorly run company with Gregg at the head and its a shame because when I signed up for working at this company I was proud to call myself an employee of Buck Or Two.

  9. You forgot another person in the name of Dennis Klein. It was known to the company before Treadway was hired that he was part of the K-Mart demise a couple of years ago in the good old USA when they went into banruptcy protection. The only difference was that his detention bonus was 750,000 US. I have just found out that he is leaving Buck or Two effective Oct.1/04. I guess his work is done. I bet his buyout is alot more than the 100/week for those mangers who stick it out to the end. On behalf of the 700 people who have lost their jobs I would like to thank everyone involved for what they have done in such a short time. Spend your dirty money wisely.

  10. We too are Buck or Two Corporate Managers who have gone through 2 resets in the past 2 years. To go through the trouble, not too mention the amount of stress put on ourselves our employees and families, only to be slapped/punched/kicked in the ass by the overzelous Gregg Treadway, and his over priced gurus from the States. He and his gurus salaries and bonuses are in total more money than all 93 Corporate Managers wages put together. We will not receive severence pay our services, but you can sure as hell bet on Treadway receiving ALL! Gregg is gone by October 1st. How anyone could sleep at night, knowing he has put out soooooooo many people out on the streets, while lining his pockets. Not only at Denninghouse, but K-Mart and Toys-R-Us. Good riddence Treadway and all your gurus. May we never meet again.

  11. Hey Greg, don’t forget your HUMMER on the way out of town. Pass by my store and I will give you a good kick in the ass. Maybe Buck or Two will help you to buy back your $900,000 home. I hope you can sleep at night. Oh, and by the way, I never bought into that story at the buying show about the poor little girl. Actually, your story about your grandmother and the peanuts was a cartoon. Do you have anything thats your own stuff.

  12. A quick clarification for those who are using this blog post as a forum for discussion of the Denninghouse bankruptcy: I don’t know that Denninghouse executive Gregg Treadway reads this blog (nor do I care to know), so the name calling serves no real purpose other than to bring down the quality of the blog itself. You would be much off to pass him in the street and mouth him off than to blindly “shout out” obscenities on this blog, not knowing whether or not he is even reading.

    Please, keep it clean. As well, I would encourage, thoughtful, informative commentary. Just be respectful when expressing your frustrations.

    Thanks,
    Doug

  13. I do apologise to Dougs Blog for the obsenities used to vent my frustration at Gregg Treadway.
    I guess to sum it up would be to say that all Buck or Two managers were lied to in thinking they had a future with the company.
    It is frustrating to be made to feel secure one month and lose your job the next.
    Our spirits were lifted so high by him only to be dropped like a hot potatoe.
    Just goes to show, nothing is secure, trust no-one!

  14. Man, I miss you guys! I only wish that I was still around to see this god-awful mess through to the end. (Um… yeah. Right!) It’s fascinating to see that all our predictions from the magic show at the Nottawasaga Resort took only five months to come true.
    Just remember this mantra and your life shall be lived smooth…
    If all else fails, blame it on “”CORPORATE!””
    -s from h (get it???)

  15. s from h, we miss you too and only can say congratularions for reading the future better than us! You know who we are, the two crazy’s. Apparently you predicted the future about “””CORPORATE””” better than us. Some of the “””CORPORATES””” have now been sold to franchise. No indication is being given as to who bought or whether we have a chance at having any job!Or do we really want to have anything further to do with Buck or Two? Gregg Treadway is apparently gone as of Oct 1st. I guess he has done his job, and very well I might add! I said at that convention he was like a preacher( a faith healer). The only thing he was healing was his and Dennis Kliens bank account. I guess it’s easy to have no feelings about peoples lives when the salaries are that big. It must be an awful feeling at night knowing that your greediness for money ruins the lives of others. S from H it was nice to hear from you, we have often thought about you!

  16. s from h, you rock!!! We have been thinking about you alot. Peg and me( you know who I mean). We all saw this coming. It just came quicker than we thought. That was some bologna flying through the air at the convention. They told us “”””Corporate””””” would dominate and that the franchisee’s would be less and less. They told franchisee’s that “””””Corporate”””” would be less. We are going to have to lease a bucket to scrape the poop which is piled soooo high. I hope you are doing very well in your new place. It would be nice to hear from you. From a fellow “”””””Corporate”””””Manager.

  17. Yo! My goal was to say some goodbyes before I left, but since I was escorted out of the building 30 minutes after giving my notice it didn’t work out that way. If I got ANYTHING out of the the American Invasion, it was the extra two weeks off… getting paid to play with my son.
    Things are going well now… not super well but about a hundred times better. The money’s better. The job is better. The sleeping at night? Priceless! And the fact that somebody somewhere up top is more focused on letting me INCREASE SALES rather than forcing me and my assistant to CLEAN THE DIRT OFF THE INSIDE OF THE STOCK ROOM DOORS makes it worth while occasionally.
    Keep posting here. I’ll give you a call sometime… as long as the phones are still connected.
    GoooOOOOO “” “”!!
    (PS-Jesus J is doing well too…)

  18. s from h. Are they hiring where you work now? We really didn’t talk much but you were a very good manger like a good many of us. I was shocked when I heard you had left the company. The word on the streets was that you were let go. Nothing can get much worse than what we are going through right now. Too bad we all didn’t realize that this was coming and got out when you did. Maybe then the big boys would have had to run the stores. LOL

    g from k

  19. Let go? Um… yeah. They were working on it though. I handed in my notice six days after my “Failing to meet standards” Coaching Discussion. I gave Jimmy Boy 2 1/2 weeks but he had to walk me out on orders from above. Cha-CHING!
    They are HURTING for management where I am. Mostly out Toronto way. If you’re interested, let me know. (Through here, I guess. I can get ahold of you from there, if the store’s still going.) We’re not the cream of the crop in the industry, but it’s a living!

    -s from h

  20. I am glad that Jesus – J is doing well. Say hello to him for me. We often think of him. The only thing good that came out of that conference , is that we made and kept some pretty good friends. We had soooo many laughs! I just want this to end quicker. Time drags on and on. We are so used to running around with our heads cut off. We corporate managers are very hard workers, and to have to have everything come to this is depressing. 4 weeks seems like it will never get here.

    L from C

  21. Bummed out in rainy BC and waiting for the inevitable death of my store. The back room is empty and the sense of hopelessness is overwhelming. I was hired as a Manager a short five months ago. I was full of excitement and looked forward to the challenge of turning my store around. It would not have taken much to make it profitable.

    Now I’m back on the job-hunting trail in a town with a double digit unemployment rate. It took me 7 months to land this job. God knows how long it will take me to land another one.

    What really crisps my crackers is knowing that given the opportunity to bring in the products that my community wanted and expected to find would have gone a long way to improving my profitablity rather than having my stock dictated by the head office in Concord, Onterrible. Not to mention the pallets of Buck or Two direct sourced CRAP that came in by the truck load. Maybe people would have bought some of that junk if I had been allowed to mark it down and get it out the door. When I took over there was stock on the shelves that was nearly 2 years old. Dogs for sure, but could I give it away and replace it with a mover… NO. Even now, I have boxes and boxes of BOT crap sitting out in the hall of my mall. People are picking through it gingerly and deciding if they want to spent 37 cents on a former $2 item that is STILL CRAP NO MATTER HOW CHEAP IT IS!!!

    I didn’t get a chance to meet other managers other than by phone, but I have heard the same disappointment over and over again. I still have two, possibly three weeks more of this insufferable nonsense to tolerate before I can stand in the line up at EI. Meanwhile, my customers on fixed incomes are really going to miss being able to buy $1 birthday cards and pick up a few treats for their grand/kids. Me too.

    I’m in till the end because I have no choice. After all, I just logged enough hours to collect my measly 14 weeks of EI with my last paycheque. The $100/week retention bonus isn’t feeling like much of an incentive or a bonus.

    My very best wishes to all Managers and their staff. I hope you find something much more satisfying and less crap laden than BOT has turned out to be. Mostly, I feel for the franchisees who have put their money down and bought into a business whose leaders have no scruples, integrity or honesty.

  22. Well said Puppeteer. I, too, was unemployed for a long period of time and am now dreading it even more than before because I know what to expect. I did turn my store around in the short time I was here. I know EXACTLY what you are going through. Best of luck.

  23. Denninghouse:

    The real reason Denninghouse failed is the loss of one franchisee on the west coast who owned over 35 stores. While Denninghouse was struglling, it was and still is a viable company; there is a solid revenue stream thanks to many successful frnachisees who continue to hack it out. When 30 stores fall in one shot you take a triple hit. 1st, you lose the revenue from royalties and rebates, 2nd you take on the realestate liability for 30 empty stores, and 3rd, you have to invest something like 6 million in new inventory. The only real sin was having too many eggs in one basket. We coud also argue that the company grew too fast and didn’t have the right infrastructure to support corporate stores, but thats another story.

  24. There is no one reason for the fall of Denninghouse and no single person or event to blame. Retail has no guarantees, and it seems almost every day, yet another chain folds. Looking at dollar stores, for years they had an isolated market. In recent years, majors have taken notice and it seems everyone from Walmart to grocery stores are bringing in mini dollar departments. Major retailers are doing whatever it takes to increase and maintain revenues for there own survival. Every “dollar store” item bought at your local grocery store is one less sale for the competing dollar store. For dollar stores the pieces of the pie keep getting smaller.

    Looking at the history of retail companies in general, dramatic changes in structure (ie: new executives, introducing new concepts and marketing) are usually common in the year or two before the company finally falls to bankruptcy. In short, it’s usually a final desperate attempt to bring back a struggling company. Unfortunately, it is usually too little, too late.

    Just because a company fails, does not mean the employees did not work hard and do everything they could to keep it going. To the store managers and corporate employees; you know you gave it your best, be proud of that and best of luck in the future.

  25. So when the 35 stores on the east coast were in trouble why didn’t BOT just try and franchise the ones they could and get out of the rest. They could have because the original franchisee filed for bankruptcy protection. No, they turned around, restocked all the stores, put managers in these stores and spent more money planogramming the new corporate stores. Then they turned around in their press releases and stated that it was the continual loses incurred by the CORPORATE stores that was the main reason for the bankruptcy. There are always a number of reasons for a company to file for bankruptcy but to always state that it was corporate that led to the demise of the company is wrong. Corporate Managers will always be able to hold their heads high for the job they did. I wonder if the executives could say the same.

  26. Some of the east coast stores were refranchised and a few others were closed. Denninghouse holds head leases for their franchised stores, so if a franchisee doesn’t make it, they have to make it corporate if the landlord won’t let them out of the lease.

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