Pitusa

Pitusa

Logo from the 1980s
Company type	Department store
Industry	Retail
Founded	1976 (1976)
Founder	Israel Kopel
Defunct	2014 (2014)
Fate	Bankrupted
Number of locations	40+ (at peak)
Revenue	$265 million (2003)
Total assets	$56 million (2003)
Number of employees	4,000 (2012)

Pitusa (Spanish: Almacenes Pitusa) was a chain of department stores operating in Puerto Rico. It was one of the largest Puerto Rican store companies and a competitor of another chain on the island, Topeka.

History

Origins

In 1976, Israel Kopel would open the first Pitusa store, completely changing the existing traditional marketing concept on the Island. From there, a process began to establish branches in areas of high population density and in commercial premises where there were adequate facilities with abundant parking.

Expanding: 1980s-2000s

On February 18, 1982, a new discount supermarket store in the chain inaugurated on Port street in Mayagüez. The chain at the time had stores in Ponce and Carolina and planned to open another discount supermarket in Caguas.

In August 1984, Banco de Ponce granted Almacenes Pitusa, Inc. a loan for the amount of $600,000 for the partial financing of the “Plaza Pitusa” project that was to be built in Carolina.

On November 15, 1984, the concept of a department store would arrive in Puerto Rico as a warehouse type. Pitusa “Extra Warehouse” would open a 46,000 square foot store in Carolina, with parking for more than 400 cars and an incredible selection.

On December 6, 1984, a new store in the chain would open in Bayamón at the Bayamón Gardens Shopping Center.

In August 1985, the president of Pitusa, Israel Kopel, considered that the increase in the operational efficiency of the company, seeking a greater volume of sales at very reasonable prices for the Puerto Rican consumer, had been the key to the success achieved by the company on the Island. With the inauguration of branch number 20 in the Santa María Shopping Center, Pitusa had become one of the largest stores on the island, revolutionizing the prevailing marketing concept in this sector since it was established in 1976. The chain of establishments, which had hundreds of employees and to which four supermarkets had been added, expected to grow even more in those next five years as part of its development plan. The competition in those last ten years had been fierce and according to some specialists, what had been observed is a true price war where the large department store chains had not decided whether to enter fully into the fierce competition unleashed by a series of firms such as Pitusa.

Other observers pointed out that the consumer was the one who had gotten the most benefit from the situation, but the conditions in which these companies would be left in the coming years if the escalating price war continues were not foreseen. In the case of supermarkets, the company wanted to develop a Cash & Carry concept where the consumer could buy food at good prices without the luxuries that prevail in other establishments of its kind. It was considered that the economic situation of the Island in the coming years would be difficult and would imply working more and applying all available administrative resources to increase efficiency in the company's operations. Pitusa planned to open a branch in Utuado in September and another in Caguas in October of that year. Similarly, the company also planned to establish a store in Aguadilla with 60,000 feet of space before the end of 1985.

On November 25, 1988, a Pitusa Extra Warehouse would open in Ponce at the Centro del Sur Mall. On April 6, 1989, the first Hypermarket in the chain opened in Levittown. On May 4, 1989, a Pitusa Extra Warehouse would open in Caguas at the Consolidated Mall.

In April 1989, the chain of stores which during the year prior had sales of $100 million dollars, was on an expansive wave that would see it open overseas the next five years about eight stores in the style of its Levittown hypermarket. It was said that some $20 million dollars were expected to be invested in the expansion project, adding that they had identified Cupey, Humacao, Aguadilla, Mayaguez, Ponce, Arecibo and Guaynabo, as possible areas for the establishment of stores. At the time the chain that included supermarkets and discount stores had about 40 stores that employed about 2,000 employees.

On August 28, 2003, Pitusa reportedly was opening stores in shopping centers in Río Grande and Yabucoa that incorporated some or all of the Pitusa Department Store, Pitusa Supermarket, and National Lumber concepts. All of the new stores were expected to be operational by the 2004 Christmas season, and all would anchor their respective shopping centers. Leon Winer, vice president of Downtown Development Corp., a real-estate development & leasing company, announced that Pitusa Department Store, Pitusa Supermarket, and National Lumber would open at the Yabucoa Plaza Shopping Center. "This is a new mall, and tenants are just beginning to build their stores," he said. "The Pitusa stores should be open by Christmas.” According to Pitusa, the supermarket would occupy 27,346 square feet, the department store 20,701 square feet, and National Lumber 15,079 square feet. Jorge Torres Caratini, partner & general manager of Plaza San Francisco Investment LLC, said Pitusa executives had signed a contract to build a 115,000 square foot store to anchor the Rio Grande Plaza shopping center. "This will probably be the biggest Pitusa store," said Torres Caratini. "It will include a department store, a supermarket, and a hardware store." He expected construction to begin in about a month at the time, and that the store would be operational by Christmas 2004. With 2001 revenue of $246 million, Almacenes Pitusa was Puerto Rico's 17th largest locally owned company, according to the 2003 Caribbean Business "Book of Lists."

On December 18, 2008, it was reported that with 43% consumer loyalty, Pitusa was Puerto Rico’s No. 1 discount chain. Enjoying a similar level of repeat business as Walmart at the time, Puerto Rico's own Pitusa was by far the most frequented discount store on the island. Some 43% visited this discount chain more than any other, followed by Capri, which came in second with 28% of the customers. Other discount chains with a small following were Topeka (3%) and La Reina (2%). In direct correlation to the island's deteriorated economic situation, one in every 10 residents said they’d shop at other discount stores more regularly than established chains. Shoppers under age 55 were the most likely to shop at discount stores. In fact. nine out of every 10 under age 55 did, compared to 83% of those age 55 or more who did.

Selling, closure, and bankruptcy

In December 2011, Pitusa confirmed it was exiting the supermarket business, selling or closing the 16 stores that made up the island wide discount food chain.

On November 27, 2012, it was announced that in a move to continue achieving operational efficiencies, Puerto Rican retailer Pitusa was to consolidate its hardware store business under Metropolitan Lumber & Hardware Inc., a company it founded in 2009. The move would transfer about $21.4 million in assets from National Lumber to the other corporation, including all existing contracts, real estate, land, improvements, equipment, vehicles and inventory related to 12 stores. The move outlined in a letter is the latest in a string of decisions retailer Pitusa had been making in recent years to tighten up its operation. Published reports had confirmed that Pitusa had been in trouble for the better part of some past three years, during which it had been consistently negotiating with suppliers to condone part of its burgeoning debt. It was also confirmed the sale of Pitusa’s Muebles y Enseres furniture business to Superbuy Furniture, a company owned by the sons of the founders of Mueblerías Berríos, Puerto Rico’s at the time largest locally owned furniture chain. The transaction involving the transfer of 22 Muebles y Enseres stores was expected to close December 4. it was refrained from revealing the financial terms of the transaction, citing a confidentiality agreement. Pitusa had some 4,000 employees in Puerto Rico.

On July 9th, 2014, it was reported that Pitusa Muebles y Enseres filed for Chapter 11 of the Bankruptcy Law with a debt amounting to $26.7 million, according to the Puerto Rico Bulletin. The bankruptcy also affected Super Buy Furniture, a company then owned by the sons of the founder of Mueblerías Berríos. Super Buy Furniture acquired the 22 furniture stores from Pitusa Muebles y Enseres in November 2012 for an undisclosed value, but it was expected to result in an additional $30 million in sales. The largest creditors were Mueblerías Berríos and Rent Express by Berríos, with debts of $3.9 million and $9.1 million, respectively. The bankruptcy affected a debt of $564,000 with the Department of the Treasury. A few branded Pitusa stores would out last this bankruptcy, but they would all eventually close or be rebranded.