retail | Apr 1, 2024 |
Pirch lawsuits show the depth of the company’s troubles

More than a week has passed since Southern California–based luxury kitchen, bath and appliance chain Pirch abruptly halted operations. Aside from a brief message notifying customers of the shutdown, the company has not issued a public statement on the current state of its business, causing concern among designers and customers, some of whom have tens of thousands of dollars in outstanding orders. Now, a series of lawsuits filed against Pirch in the days since its shutdown shed new light on the company’s financial woes.

On March 25—five days after Pirch’s announcement—luxury appliance manufacturer Sub-Zero Group filed a lawsuit accusing Pirch of a breach of written credit agreement, among other claims. The vendor alleges Pirch started missing payments for inventory beginning around January 20, and failed to notify Sub-Zero of a change in its financial condition—including the recent closure of its showrooms and the pause on operations. As a result, Sub-Zero is demanding that Pirch return its inventory to the manufacturer, along with an outstanding sum of $4,221,237, plus interest and attorney’s fees.

As three other recently-filed suits reveal, Pirch has also fallen behind on its rent for several showroom locations throughout Southern California. On March 26, Eastgroup Properties—the owner of the Pirch’s Oceanside location—filed suit against the company for recovery of unpaid rent totaling $191,997 for the months of February and March. According to the filing, Pirch will accrue damages of $3,049 per day starting on April 1 until the issue is resolved. Over at Pirch’s La Jolla location, landlord UTC Venture has also sued the company, alleging $559,488 in unpaid rent and related charges over the last year. Most recently, a third landlord, John Cavanaugh, has sued Pirch for $10,518 in overdue rent at the company’s Solana Beach location.

Pirch’s legal troubles now extend to its customers as well. As BOH previously reported, a number of designer customers have outstanding orders with the company—in some cases, totaling up to $100,000 or more—and have not heard back from Pirch on the matter. As a result, several are turning to the legal system: One small claims court filing from March 21, for example, reveals that San Diego designer Etta Osborn of Etta’s Interiors is suing the company for $11,599 in plumbing products that were ordered in December and never delivered.

In another civil suit, customer Peter Sun is suing Pirch for breach of contract. According to the filing, Sun contracted Charco Design and Build to design his home in La Jolla, purchasing $62,166 in bathroom fixtures and $61,079 in kitchen appliances from Pirch in the summer of 2022. The order was paid in full. While the items were originally set to be delivered within a year, Pirch agreed to store the merchandise until Sun’s project had worked through some unexpected construction delays. On March 21, 2024, when Sun attempted to pick up his order at the warehouse, he found the facility shuttered. According to the suit, he is currently unable to access $123,245 in items.

Pirch did not respond to a request for comment on the lawsuits or the current state of the business.

A sales representative at Pirch, who spoke to Business of Home on the condition of anonymity, says that the company has been facing credit holds due to outstanding balances with vendors since the fall of 2023. “It’s just snowballed since then,” he says. As delays extended, upper management urged business as usual in the company’s showrooms, promising that an impending influx of capital from a bank or investors would soon clear everything up. But the good news never came. “It was like if your parents told you you’re going to Disneyland, and they kept pushing it out and pushing it out,” he says. “At some point, you’re like, ‘We’re never going to Disneyland.’”

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