Prizant's next move unclear after closure

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Richard Hvizdak, with hundreds of millions in net worth, has enough money to personally pay back each of the hundreds of Prizant's customers who put money down on carpeting, then were left empty-handed when the 10-store chain closed its doors last month.

But he's not sure he's the one responsible for refunding customers, he said yesterday while on business in Florida. He said Prizant's record keeping and finances were a wreck when he came on board last year, and that by the time he dispatched the former CEO, it was too late to right the ship.

"There's nobody who's lost more than me on this," he said, bitter over the deal that has hurt both his reputation and his pocketbook. He feels badly for the customers, he said, but, "I'm the biggest loser by a hundredfold."

Over the years, Mr. Hvizdak has counted among his holdings a hotel, the Old Stonewall Golf Club, a Shakespearean pub and restaurant, an aviation company, a title search company called National Real Estate Information Services, and most recently an antique and oriental rug warehouse in Pittsburgh's West End, called "Artifacts."

Mr. Hvizdak became an investor at floundering Prizant's in the late spring or early summer, recruited by owners Rob Lang and Mark Scioscia, principals of Sweetwater Investors, which bought the flooring chain in 2006 from founder Samuel Prizant. Mr. Hvizdak is said to have invested seven figures in the company.

How such a successful businessman might make such a poor choice of investment is beyond his own introspection. "Everybody makes good deals and bad deals," he said with a sigh.

He's a businessman first and foremost, but he also is a philanthropist (having committed $1 million to Children's Hospital) and a memorabilia collector. Mr. Hvizdak once paid $82,000 for four autographed Tiger Woods Grand Slam tournament flags, paid $25,000 for a 14-carat diamond necklace for his wife, and he also once bid $175,000 at a charity auction to have dinner with actress Jamie Lee Curtis. His collectibles store in the West End was reported last year to have $50 million in inventory.

Meanwhile, it would cost an estimated $200,000 to $400,000 to reimburse the 200 to 300 people who made deposits on their flooring but never received the product or never got their money back. It would cost more to pay the former employees waiting for their commission checks from November and December, and still more to pay the roughly three dozen installation crews the company had been contracting with.

He said he was talking with his attorney, Matthew Fearing, about how best to go about that, how much of the debts are his responsibility, and how much are Mr. Scioscia's and Mr. Lang's.

"It's a massive mess when you close 10 stores," he said. "I'm a stand-up guy. If we're responsible," then we'll pay. People in his employ still are trying to track down carpets that were ordered but never installed, he said.

Mr. Hvizdak, originally from Lawrence County, was merely an investor with Sweetwater until December, when, the week before Prizant's closed five of its 10 stores, Mr. Lang stepped down as CEO (or was fired, according to Mr. Hvizdak). Mr. Hvizdak essentially ran the company for a few weeks before shutting down all 10 stores, perhaps not fully realizing how serious the company's debt and credit issues had become since mid-2006, when Mr. Lang and Mr. Scioscia took over. Mr. Prizant said the company was in the black when he sold it.

Mr. Lang disputed that characterization yesterday in his first remarks since the closure.

"Contrary to what Mr. Prizant stated, we bought a company that was losing money, had a declining market share," and declining revenues, he said.

But Mr. Hvizdak pinned the blame on the former owners. "They mismanaged everything," he said, without offering specifics.

And many former employees said the troubles began under Sweetwater's ownership.

"It all started end of May, beginning of June [2007]. Our orders started coming in very slowly," said former Prizant's saleswoman Becky Sherry.

That's because the company had lost its credit line with flooring manufacturers. Normally, a retail business receives its inventory, then pays a bill at the end of the month. But if a business stops paying bills, suppliers require upfront payment via cash or certified checks -- something Prizant's apparently was unable to do.

Two weeks of wait time, customary for a carpet delivery, soon became a month, then six weeks. Customers bailed out.

By autumn, to make up what had been lost, the directive came from ownership (it's unclear which owners) that sales people should try to persuade customers to pay 75 percent of their bills upfront, rather than the customary half or one-third.

That ruffled some feathers, according to another salesperson, Kevin Duffy, who was with Prizant's for 30 years before being let go just before the stores closed. He and Ms. Sherry both said salespeople often wouldn't comply, because they didn't think it was right to ask for so much, and because they sensed more was amiss than ownership was letting on.

In retrospect, they said, the behavior was questionable, if ownership was collecting down payments when it knew the business was going to close.

That is one of the allegations the state Attorney General's office is investigating. "To date we have received 36 consumer complaints, but we believe there are many more consumers who are still owed goods or services. We encourage them to contact our Bureau of Consumer Protection as soon as possible to file formal complaints," said attorney general spokesman Nils Frederiksen. "Out-of-state residents should also file complaints with their own AG's office or consumer protection agency."

Molyneaux flooring, another Pittsburgh chain, has offered former Prizant's customers discounts if they made a deposit but never received carpeting, so long as they have proof such as a canceled check or deposit receipt. That offer expires Jan. 15, said owner Pat Molyneaux.

But those discounts, up to one-third of the full Prizant's order, still won't satisfy the customers who paid more than one-third; these customers want to know Prizant's next move. (Neither Prizant's nor Sweetwater Investors has filed for federal bankruptcy protection, according to court filings, and it's unclear if they intend to do so. )

Mr. Scioscia called the Post-Gazette to say Prizant's would be making an announcement this week regarding how customers could get their money back, but so far, none has been forthcoming.

"We are working on it. The plan is taking a little bit longer than we thought it was going to take," Mr. Lang said yesterday.

A message could come next week, he said. Mr. Hvizdak was less certain of a timeline.

Mr. Scioscia is on the Quaker Valley school board, and serves as the board treasurer. He didn't return a call yesterday.

"They never told anybody anything," said Dave Belanger, a former Prizant's store manager. "That is the worst part about it -- the people who are being left out in the cold, both customers and employees.

"I just don't know where all the money could have gone. We know what we were selling. We know that the bills [should have been] covered. Where did it all go?"


Bill Toland can be reached at btoland@post-gazette.com or 412-263-2625.


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