The Rag Shop, a craft store chain with 14 South Florida locations, is throwing in the towel after 44 years in business.
The retailer, whose New Jersey parent company was purchased by Boca Raton-based buyout firm Sun Capital Partners Inc. in 2004, is liquidating its inventory of beads, fabrics and scrapbook supplies and soon will be shuttering its 61 stores in a deal approved last week by the U.S. Bankruptcy Court in Brooklyn.
“I’m a big advocate of Rag Shop and will be sorry to see it go,” said Mary Bulone, 60, of Delray Beach. Bulone, an arts and crafts aficionado, was hunting for bargains on picture frames and other novelties at the Boca Raton store Wednesday.
All Rag Shop items are marked down 20 percent and holiday and clearance items are half-price as the company works to shed more than $50 million worth of inventory.
South Florida store managers expect to lock up their stores for good in the next eight to 10 weeks, although no firm closing dates have been set. A total of about 1,400 employees in five states, including Florida, will lose their jobs, court records show.
Rag Shop company officials could not be reached for comment Wednesday.
At the Boca Raton and Fort Lauderdale stores, going-out-of-business signs hung from the ceiling and a steady stream of shoppers browsed for deals on everything from colorful ribbons and yarns of wool to paper supplies and paint.
“It’s a lot busier now than we were before,” said Doris Carrillos, manager for the Fort Lauderdale store.
Rag Shop’s business has suffered in recent years as retail giants Wal-Mart and Target stocked up crafts aisles and superstores such as Jo-Ann Stores Inc. and Michael’s Stores Inc. continue to churn sales.
Sun Capital attempted to turn around the publicly held company, paying $9.2 million to take it private in 2004, but Rag Shop was still unable to pull itself out of debt. The craft store chain had a net loss of $8.4 million for the year ended Sept. 2.
The Rag Shop filed for bankruptcy in May and court filings show the company’s debts totaled about $52.5 million. Assets amounted to about $35.3 million.
Court documents filed last month show the company expects to lose $1 million by the end of June.
For faithful customers like Bulone, the company’s demise feels like a personal loss.
“It’s my favorite store and I used to tell family members to give me Rag Shop gift certificates as presents. Now that’s not going to happen anymore,” she said.
Staff Writer Jaclyn Giovis can be reached at or 954-356-4668. Staff Writer Arlene Satchell can be reached at or 954-356-4209.
