Last Chance For Ailing Ernst

Analysts predict troubled Ernst Home Centers has at least another year to reverse mounting losses, thanks to a recenrly-obtained $100 million credit line.

The reprieve comes on the heels of the chain cancelling plans to add 13 superstores this year and closing nine locations, including eight of the 24 warehouses opened in 1995.

Shuttered were South Tacoma, Wa.; Beaverton, Or.; Fargo, N.D.; Sioux Falls, S.D.; Riverdale, Ut.; Henderson, Nv.; Chico, Ca., and two

Litigation Bankrupts Yard

Escondido Lumber Co.. Escondido, Ca., recently filed for Chapter 1 I bankruptcy protection to suspend years-long litigation between majority and minority shareholders.

Co-owner Patricia Geib said expensive, ongoing litigation and a slow economy led to filing, and a reorganization plan will be completed within 45 days.

Since September 1992, Geib and her partners have been in court battling relatives who own Geib Lumber, stores in Tucson, Az.

Ernst suffered a 15.9Vo dive in same-store sales during the first quarter with fourth quarter losses of $47.6 million, including $25 million to establish Homestyles departments in all stores.

To fund aggressive expansion, Ernst went public in Sept. 1994 at $16 a share, but recently sunk to about $2 a share. "This is really make or break time," said one analyst. "How many more times can you change your focus?"

Vista, Ca., which separated from Escondido Lumber earlier that year. Ironically, in June 1993, a trickster sent out phony bankruptcy notices to hundreds of Geib's customers, suppliers and others erroneously announcing that Escondido Lumber was going out of business.

More Lumber Stays In West

An increasing share of western lumber production is being shipped to western states, according to the West- ern Wood Products Association's Destination of Shipments report.

More than 75Vo of shipments to identified markets went to western destinations, up from 73.6Vo in 1994 and the highest percentage in the 1990s.

California, the largest market for western lumber, showed its first increase in five years. Steadily falling from 1991's 3l%o to 1994's 25.7Vo, the percent of shipments to California rose slightly last year to 26Vo.

Other western destinations continued to take a larger share of shipments. Four years ago, 4l .8Vo was shipped to western states other than California, rising to 47.9Vo in 1994 and 49.l%o in 1995. Last year, 13.6%o went to the Midwest, 7.3Vo to the South and 4.l%o to the East.

Trucks remained the preferred mode of transportation, hauling 60.3Vo of lumber volumes. Rail moved 38.6Vo of shipments withl.5%o moved by water.

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