National Wholesale Liquidators is back from liquidation

"People ask me, why did we go back?" says Scott Rosen, boss at family-owned National Wholesale Liquidators, which has returned from its own 2009 bankruptcy liquidation, and is opening the first of six planned Philadelphia stores in Frankford next week.

"I'll tell you," Rosen said: "We had more than 4,000 employees. The average employee worked 16, 17 years for the company. The family had a responsibility. The story couldn't end where it ended just because the banking world collapsed."

So National Wholesale Liquidators, based in West Hempstead, Long Island, is opening a store in a former Kmart at 900 Orthodox St., in Philadelphia's Frankford section, May 17. As a gesture to the city, the chain is donating sports equipment to students at St. Martin de Porres School, which won the Pennsylvania eighth-grade boys' parochial school basketball title this year, though it doesn't have a gym.

So how can Rosen open stores as chains from Aeropostale to Sports Authority are going out, under attack from internet retailers?

"We have a very different business model," Rosen says. "We are a value retailer that also offers a treasure-hunt experience."

He says the firm's typical shopper visits four times a month, hunting for bargains in housewares and hardware, among 60 categories. "We bought a truckload of Swiffer brooms at 50 cents on the dollar, after they changed the cardboard box," Rosen says. "It's $9.99 at our store, and $20 everywhere else."

The opening extends the chain's revival under Rosen, a Penn-trained periodontist who returned home to Long Island after a marital breakup 25 years ago to join the family business.

Ten years ago, the chain peaked at 47 stores - six in Philly - with 4,200 staff and $500 million in yearly sales, before both sales and bank lending tumbled in the credit crisis and recession of 2008. Asset sales raised little cash, and GE Capital and other lenders told the court they saw no hope in refinancing. The Chapter 11 bankruptcy converted to a Chapter 7 liquidation in early 2009.

But when Liquidators liquidated, Rosen and family members pooled "first $12 million, then $15 million to buy back first five stores and then the intellectual property" - name, systems, customer lists - from the court-ordered sale, Rosen said.

"When we started from scratch in January of '09, you couldn't borrow a nickel. All the financing came from what the family could put together again."

There was no inventory. "But we got the most important thing: incredibly loyal customers - and vendors, some of them for 25 years, they believed in us, and they made it possible for us to come back."

Banks returned as the stores reopened. "Now we're financed by Capital One, which is an incredible institution. They believe in us and in our growth story."

The chain has recovered to 13 stores with 1,000 workers and plans five more in Philadelphia.

Rosen counts at least eight employees at the new Orthodox Street store who worked for the chain's former stores at St. Vincent's near Cottman and at Rising Sun Plaza on Adams Avenue and 10 more from the former Kmart on the site. "We are counting on customers to re-shop us here," he said.

Rosen's parents still come to work. "And there's another generation behind me, I got four kids, dabbling in the business. I hope to be able to get to where we were, half a billion dollar business. Then I'll be done."

I asked if he knew old Albert Boscov, who also bought back into his family department-store chain and helped refloat it. "We sold him mops back in 1973," Rosen said, laughing. "They're kicking (the competition) today."

JoeD@phillynews.com

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