For years, Gretchen Pelletier planned her kitchen remodel and dreamed of a roomy sink where she could wash her homegrown Romaine. On Jan. 27, she and her husband headed to Pirch, a high-end kitchen and bath showroom at Westfield UTC, and bought $8,500 worth of fixtures they’d been eyeing.
Two months later, they have received two of seven items, a hood fan and garbage disposal, and she fears she’ll never see the rest — or get her money back.
Also see: Pirch, luxury kitchen retailer, sued for unpaid rent and inventory, totaling $5 million
“My husband really wanted this $900 oven. So we’re really lucky that I talked him out of that one,” said Pelletier, a retired writer who lives in Escondido.
Pirch, a San Diego County company that sold luxury kitchen and bath appliances at stores throughout Southern California, suddenly closed its doors March 20. The company stopped fulfilling paid orders and has offered no public announcement or explanation as to its future plans or financial situation.
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. Seen here is the Costa Mesa store, which was among the closures. (File photo by Nick Koon / Orange County Register)
There are six Pirch showrooms in Southern California, including stores in Mission Viejo, Costa Mesa, Rancho Mirage, Glendale and two in San Diego.
Pirch’s COO, Will Dillard, a 10-year veteran of the company, stopped working there this month, according to LinkedIn, and the profile of Pirch’s CEO, Steve Smith, disappeared from that site. Gene Hodges, a Pirch marketing executive, has not replied to an interview request but said he will share information about “re-opening plans” when that is available.
Court records show that three of Pirch’s landlords and at least one appliance maker, Sub-Zero, are suing the company for more than $5 million. A Pirch customer sued Pirch last week, claiming that on March 21 he couldn’t retrieve the items he’d bought and paid for from a Pirch warehouse in Oceanside. And online reviews of the company dating back years show a spotty track record of orders that were sometimes delayed or incomplete. In 2017, a Chicago couple sued Pirch for allegedly never delivering $35,900 in kitchen goods.
“All external signs point to the company being in financial distress,” said Christine E. Baur, a San Diego bankruptcy attorney. “The company probably is scrambling to try and shore itself up, whether that’s with a new capital infusion, a transaction with a new buyer coming in, maybe trying to get some new financing, which is very challenging in this economic market with high interest rates.”
Like Pelletier and her husband, Pirch’s latest clients, ranging from homeowners doing targeted upgrades to designers managing multiple projects to at least one luxury custom home builder, are scrambling to see what items or payments they can recover and whether their project timelines have blown up or will stay on track.
Baur said consumers will have different chances of success in getting back money they paid to Pirch, depending on whether the company files for bankruptcy.
If it does not, one avenue for people owed money — or merchandise — is civil lawsuits, potentially as a class action.
“Non-bankruptcy, in a way, can be equally if not more challenging than a bankruptcy case,” she said, “because the benefit of the bankruptcy case is it gives you a structure. It gives you a legal process to follow. And it gives you judicial oversight.” Without that, customers “are going to be left in a little bit of a limbo land, and it’s going to be up to them to pursue their claims.”
Under Chapter 11, the largest creditors, those owed most money, come together in a committee that helps shape a company’s reorganization and repayment plan.
Secured debts — loans with collateral — are typically paid first. Unsecured debt — which can include rent, unfulfilled orders or wages due — is lower priority in bankruptcy law. Certain amounts of specialized debt, like wages and consumer deposits for prepaid merchandise, get priority.
“Depending on the available assets and the amount of liabilities in a bankruptcy case, consumers who put down a deposit for unpaid goods will have a higher chance of recovery of $3,350” of the money they are owed, she said.
Chapter 7 is much more drastic because it is a sale of the debtor’s nonexempt property with proceeds going to creditors so the chance of recovering assets is much lower.
One upside to bankruptcy is that different parties — creditors, the government — have a right to financial documents that are otherwise not public. “There’s lots of transparency required in a bankruptcy process. I think the phrase is ‘Sunshine is the best disinfectant.’ And that’s what bankruptcy provides,” Baur said.
Consumers can explore requesting credit card chargebacks and disputes if they haven’t already done that, Baur added.
But even disputes and chargebacks, which are designed to protect consumers in case of fraud or situations where a product isn’t delivered or doesn’t work, aren’t a given.
Matt O’Brien said he and his husband are disputing $40,000 in orders that were never fulfilled by Pirch. The hitch: The purchase was made last summer — they timed their order so the appliances, mostly from Thermador, would be delivered in sync with the renovation schedule for their downtown condo. So much time has passed that Chase might not protect the purchase, he said.
All these worries couldn’t come at a less convenient time: The couple is expecting triplets and want the renovation to wrap up before they’re caring for three infants.
“We’re now wondering whether we’re going to be taking our newborns home from the hospital to our own home or not,” O’Brien said.
He feels stuck between Chase, Pirch and Thermador, a maker of luxury ovens and cooking ranges. Thermador is what drew him to Pirch, not the other way around — and he chose Pirch because it was a “preferred dealer” for Thermador, he added.
“We trusted them because they’re all over Southern California. They’re associated with these brands. They’re in this fancy shopping mall, selling luxury appliances,” he said, speaking of Pirch. “Honestly, we didn’t do that much deep research. We’re just kind of your average consumer trying to figure out how do we buy this brand?”
O’Brien has been in touch with Thermador, which for now told him to follow up with Pirch.
Pelletier and her husband are also working a few angles. They need the remodel to stay on track, so they’re hoping to buy what’s missing from another merchant. They plan to contact their credit card company. And her husband connected with a Pirch employee last week, who told him, “Kind of just wait and see, basically. Nothing’s happening right now, but we’ll let people know,” she said.
Test emails sent by a Union-Tribune reporter to two email addresses Pirch provided to customers for help with cancellations and refunds remain unanswered more than a week later. A third inquiry, sent to their email about open orders, received a form response.
“We are working through a lot of inquiries. It may take a few days to get back to you with answers, but someone from PIRCH will contact you as soon as we can,” the company replied March 25.