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On Sept. 30, unless something drastic intervenes, an Eastern Kentucky institution will close its doors for the last time, with an impact that will be felt across the region.

On Thursday, Dawahares, a chain of clothing stores that had its start in Jenkins, filed a motion in bankruptcy court asking for an order authorizing it to close its remaining 22 stores in order to pay off mounting debt that had already forced it to close nine of its stores.

The Pike County stores, which employ about 30 people at the South Side Mall in Goody and in Coal Run, are on the chopping block as well.

Dawahares President Harding Dawahare said that while there are efforts underway to try to continue the business in some form, it doesn't look hopeful, as the company is planning to begin closing sales to liquidate merchandise.

 
"Unless there's a guardian angel, (the closing will) be Sept. 30," he said.

The reasons for the decision to close are numerous, Dawahare said, but it is mainly because of the current downturn in the economy and its effects over the past six to eight months.

The company, he said, has tried to work out a solution to its financial issues, but ultimately could not.

"We tried to work with our bank to create a plan that would allow us to go forward and they just decided not to buy in," he said. "I'm not blaming them, because their money's at stake and they didn't want to risk it anymore in this economy.

"When the bank asked for the money, the only way to do that is to liquidate."

 
 
According to the company's original bankruptcy filing in May, the company had assets of $10 million and debts of nearly $9.3 million.

Some of the biggest debts, the filings show, are owed to merchandise suppliers, such as Dooney & Bourke, to which the company owes nearly $200,000 and collectibles company Ganz, to which the company owes nearly $120,000.

According to last week's filing, the company claims that it will exhaust all its cash by October and that selling the stores will not bring enough cash to pay back Fifth Third Bank.

Dawahare said that the company should be able to pay the bank back in full, but in order to do so, it must close.

The Pikeville and Southside Mall stores, he said, are probably two of the best stores in the company, and it would be possible to keep them and about five other stores in a small chain, but there are legal and economic issues involved that might prevent it.

At this point, the closing seems inevitable.

"It's very depressing for the family, for the employees, for the customers — it's just a very depressing situation," Dawahare said. "We continue to look for a way out, but we don't see it. Unfortunately, it's something that we just can't fix.

"I apologize to the customers, employees and families that it's happening. It was a group effort to get where we were and a group effort that's gotten us to where we are."

Pike County Chamber of Commerce President Brad Hall said the closing of the Pike County stores, will hurt, but he remains optimistic.

"There's several jobs that will be lost there and it's going to leave kind of a gap in that particular industry in this area," Hall said, adding it won't be long before another company steps up. "There's no doubt in my mind that somebody will fill that gap."

 
 
The current economic situation, Hall said, will actually present a good opportunity.

"I think that our current economic issues are going to bring opportunity for local retail," he said, adding people can't afford to travel anymore just to shop. "If it costs them $4 a gallon (for gas) to go to Lexington or Charleston, they're going to spend that money here instead of Lexington or Charleston."

The employees, Hall said, should not have much trouble finding a job locally.

"I think there are definitely other jobs in the retail industry that can support it," he said. "I know that some stores have had difficulty in getting good employees and, obviously, there's a lot of good employees there at Dawahares."

In addition to the two Pike County stores, the stores that will be closed include locations in Louisville, Lexington, Paintsville, Hazard and Whitesburg.

According to a company history on its website, Dawahares began when Serur Frank Dawahare, born in 1888, fled his home of Damascus, Syria, to escape religious persecution and eventually ended up in Jenkins.

Serur Dawahare then sold items door-to-door until he built up enough capital to open a store in Jenkins.

The company grew, with the Pikeville store, the company's third, opening in 1946. After Serur Dawahare's death in 1951, three generations took the reigns of the company, eventually opening 31 stores across Kentucky and even entering into West Virginia.

Harding Dawahare said the store closings will affect around 400 employees throughout the chain.

A hearing has been scheduled in bankruptcy court on Friday to hear the company's motion to be allowed to close.

Story created Jul 07, 2008 - 17:13:49 CDT.

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Dawahares in Pikeville, Kentucky
The Pikeville Ky store was the third for Dawahares. It has been in Pikeville since 1946

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Mount Sterling, Kentucky

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Here's a picture of the Grand Opening of Dawahares in Hazard, Kentucky (Perry County) in 1947.

[wiseguy93]

It's an end of an era for Dawahares. The Lexington-based chain announced Thursday night it will be closing its 22 remaining stores.

Dawahares says it's going out of business because it can't raise the money it needs to continue operations. The 101-year-old family-owned company expects to run out of money by October.

Dawahares said it expects the liquidation to begin July 12th. This comes after the company filed for chapter 11 bankruptcy last month-- and closed 7 stores. Now, all its stores, including the four locations in Lexington, will be closing

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