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Hoff Jewelers seeks bankruptcy shelter
Slow sales and tighter credit led to a Chapter 11 filing, from which the CEO expects to recover by closing some stores.
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Hoff Jewelers Inc. of New Brighton has filed for Chapter 11 protection from creditors under federal bankruptcy law, listing a debt of about $3.5 million and net assets of $50,000 or less.
The 70-year-old, privately owned business, which operates stores in five Twin Cities shopping malls under the name "Hoff Jewelers and Diamond Importers," filed in U.S. Bankruptcy Court in St. Paul in hopes of reorganizing and emerging from bankruptcy by closing one or two of its stores, said Stevan Hoff, CEO and president. He declined to disclose which stores might be closed.
"I'm pretty confident we can make our way out of Chapter 11," Hoff said in an interview. "It's just a matter of how many stores we can retain." The company has stores in Rosedale Center in Roseville, Burnsville Center, Maplewood Mall, Northtown Mall in Blaine and Eden Prairie Center.
Hoff Jewelers was started in 1938 by Hoff's father, Frank, in the Como Park neighborhood of St. Paul. Stevan Hoff took over the business in 1979, when the firm was incorporated. The company has continued to operate as a family owned business and has 45 employees, including Stevan Hoff and three other members of his family.
The company was forced into Chapter 11 by a combination of conditions, Hoff said. There was an industrywide downturn in jewelry sales in 2007 that was linked to the troubled national economy, and there also was "a dramatic tightening of credit from financial institutions and from the trade that made it more difficult to bring in merchandise for five stores," he said.
In addition, Hoff Jewelers was facing a number of larger competitors as a result of a consolidation in the retail jewelry business, Hoff said. At the same time, the company was shouldering a considerable amount of debt left over from an unsuccessful expansion in the late 1990s that later caused it to close seven retail stores, he said.
More details about the company's finances will be submitted to the bankruptcy court in a few weeks, Hoff said.
"The initial filing was to prevent us from getting totally drained of merchandise or cash, so we can continue to operate," Hoff said. "We want to get permission from the court to proceed quickly with liquidating inventory out of several stores to raise cash."
Steve Alexander • 612-673-4553
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