Pirch, luxury kitchen retailer, sued for unpaid rent and inventory, totaling $5 million – Orange County Register

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By Roxana Popescu | San Diego Union-Tribune

Pirch, the kitchen and bath merchant based in San Diego County that halted operations last week, has been sued by several parties alleging the luxury retailer owes more than $5 million in unpaid rent and inventory.

In court filings this week, two landlords said Pirch owed almost $850,000 in back rent — at its Oceanside distribution center, and its airy Westfield UTC showroom, where it failed to keep up on its rent of almost $100,000 a month. A third lawsuit, filed Monday by high-end refrigerator maker Sub-Zero, claims Pirch owes $4.22 million. In addition, a complaint filed in December in Los Angeles County shows Pirch was the subject of an eviction filed by its landlord there.

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The luxury kitchen and bath retailer that made elevated customer service a key part of its brand abruptly closed its doors on March 20, informing shoppers through a statement on its website and signs posted to doors of its showrooms that it was “temporarily” closed. Employees were notified in an 81-word email sent that same day.

There are six Pirch showrooms scattered throughout Southern California, including stores in Mission Viejo, Costa Mesa, Glendale, Rancho Mirage and two in San Diego County.

A week later, there’s no sign that the business is reopening, and customers have said their pleas for refunds or clarity on order fulfillment have gone unanswered. Stores remain closed. Workers who had been employed at Pirch as of last week have updated social media profiles to show they are looking for jobs or no longer with Pirch. The LinkedIn profile of Steve Smith, the company’s president and CEO, is now unaccessible.

Gene Hodges, who heads Pirch’s marketing and corporate communications, confirmed in an email Thursday that the company’s retail locations remain shuttered.

Interior designer Bobby Smith peers through the window of the temporarily shuttered PIRCH store at Westfield UTC.
The day Pirch closed its doors, interior designer Bobby Smith peered through the window of the shuttered Pirch showroom at Westfield UTC. (Roxana Popescu/The San Diego Union-Tribune)

“Our showrooms and warehouses are still closed. There has not yet been an announcement of re-opening plans. I will share that info with you as soon as it is available,” he wrote.

Unpaid inventory, rent backlog

Court filings suggest the company’s past due accounts reach back at least several months.

The lawsuit and eviction filings allege that Pirch stopped making payments and wasn’t transparent about its finances.

According to the Sub-Zero complaint, around Jan. 20 Pirch defaulted on its credit agreement when it failed to pay for delivered inventory totaling $4.22 million. That figure doesn’t include a 1.5 percent monthly interest rate, late charges and other fees. The complaint includes Pirch’s 2019 application for credit and named its corporate parent, private equity company L. Catterton.

“Within the last four years, Pirch became indebted to Sub-Zero on an open book account … for Inventory sold and delivered to Pirch at Pirch’s special insistence and request,” the complaint says.

At Westfield UTC, Pirch sold premium kitchen and bath fixtures complemented by designer services out of a 23,747-square-foot showroom it leased for $96,597 a month.

An eviction complaint filed Feb. 29, about three weeks before the store closed, said Pirch was behind on its rent and owed more than $500,000. On Feb. 9 and again on March 6, Pirch was sent notices saying it had 10 days to pay or move out. The store stayed put, and the back rent grew to $748,626, according to court filings, but the company made a partial payment of $100,000 on Monday.

That brings the amount Pirch owes in rent to its UTC landlord to $648,626, plus future rent prorated at $3,176 a day until it moves out, according to the complaint.

An eviction complaint filed Tuesday by the landlord of its Oceanside location, at 1322 Rocky Point Drive, Unit A, said Pirch didn’t pay rent, expenses and almost $10,000 in late charges in February and March. The total: $191,998.

That landlord, Eastgroup Properties, gave Pirch a three-day notice to vacate the 67,913-square-foot space on March 20. “You must pay the amount of said charges in full, or quit said premises and deliver up possession of the same to Landlord,” the notice stated.

That same day, the company’s head of HR emailed employees it was ceasing operations.

This story originally appeared in San Diego Union-Tribune.

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