It's business as usual at Hole's Enjoy Centre after unsecured creditors approved a financial restructuring proposal Tuesday.
The proposal by Hole's Greenhouses & Gardens Ltd. postpones payments to the creditors. It provides relief from cash flow pressures brought on by a rocky startup.
Company president Bill Hole said the firm will now be working with new lenders to aid it in the restructuring process. Throughout that period Hole's will continue operations as usual. Despite its financial issues, the company has sufficient cash flow from operations to purchase goods and services and continue normal operations. Employees are being paid on time, Hole said.
In a conference room last Friday overlooking the Enjoy Centre, Bill and his brother Jim studied the mix of greenhouse and shopping centre they created just over three years ago. The brothers have come a long way since they left the family farm and the original Hole's location on Bellerose Drive. This much more ambitious project is working, they just have to make it better, said Jim.
"We just had to really evaluate the entire facility and say yes, what is working well, what can we improve on and what do we say that was a mistake," he said.
Moving forward
With the proposal to creditors approved, the company will lease out all its available spaces and focus on the things that are thriving, while getting rid of product lines and services that have proven unsuccessful, Bill added. The company will also retrain some staff and hire new people to fill vacant positions and bring in added expertise.
"The next thing is to complete all of the work of getting the plan of how our cash flows and our lenders and everything – getting all that into place, that's the most important thing," he said. "When that is put to bed then we can at least say we can focus on the day-to-day operations and spend a lot more time there."
Bill said the financial problems began when the Enjoy Centre struggled with construction delays and poor weather conditions in the peak sales season. Further stresses came when some tenants defaulted on lease payments or changed ownership. Construction delays on developments and major roadways in the area affected visitor numbers and accessibility.
The centre also needs to change its marketing strategies. Bill said one of the major mistakes was not giving consumers enough time to adjust to the new location and company model of Hole's Greenhouses. Many of its customers had a nostalgic connection with the old facility and the Holes may have rushed the change, he said.
"We didn't have a good enough plan to ease people into this change," he said. "We should have spent a lot more time and dedication to saying how we are going to help them get accustomed."
It's been tough for the brothers to sell their vision of change. When voices grew louder that the new centre lacked the feel of their old facility, Bill read his staff a letter that he received from an old customer. The letter explained how disappointed the writer was in the new facility and that Bill had destroyed his parents' legacy. Bill then told his staff the letter was written in May 1979, referring to changes on the family farm.
The brothers don't think as much about change because they've grown up with it, added Jim. Life on their parents' farm was unpredictable. One year the weather kept them from bringing in the crops on time. Another year they turned the farm into the city's most popular greenhouse facility.
As long as their mother Lois was around, change was easy, because she always talked with the customers, Bill said. Now that her sons run the company, they want to continue that relationship, but they also need to run the business, he said.
"Everybody still wants us to be on the floor. The minute we step off the floor they say it's not like it used to be," he said. "In the old days we had Mom there, and now Mom is not around … that's why we are here all the time. On weekends we come in and talk to people."
European influence
When the Holes first decided to move the greenhouse from the family farm on Bellerose Drive to the Enjoy Centre on Riel Drive, they were taking inspiration from garden centres in Europe, Bill said. There, he said, it is typical for greenhouses to include a café or restaurant, catering to a younger generation of gardeners that were looking for a broader selection of services.
That's why they also decided to add a number of retailers to the Enjoy Centre, such as the wellness centre and spa, the bakery and grocery market, and the banquet facility, he said.
"This next generation of consumer is a much different consumer than the ones that we survived on for many years," he said. "That original consumer was a very enthusiastic, dedicated gardener. This next generation has got a lot of other things that you are competing with."
He adds that today's greenhouses struggle to compete with the big box stores that also offer a selection of gardening supplies and plants. To stand out, the Enjoy Centre needs to provide better expertise and customer services, he said.
"We want to get it to the point that people can think of it as good or better – hopefully better than what it was in the old facility," he said. "But we need the time to do it."
In the letter sent to his creditors in September, Hole wrote the company had filed a financial proposal with the Alberta Court of Queen's Bench to restructure its debt to unsecured creditors. The letter addressed 151 creditors in total, with claims ranging from $262 to just over $100,000.
Under the proposal put forward, creditors had the choice of accepting $1,000 or the amount they were owed as of Sept. 16, provided this was less than $1,000.
Most were expected to accept a second option and receive promissory notes equivalent to 75 per cent of their claim, which can then be redeemed over a four-year period starting in June 2015. In total, the company owes about $1.47 million to unsecured creditors.
"We are not walking away from this, and that's what I told everyone," Bill later told the Gazette.
