Bank seizes control of Northern Mountain Supply inventory and locks doors

Shutting down a retail operation that had been in business since 1974 wasn’t exactly how the owners of Northern Mountain Supply in Eureka, Calif., envisioned ringing in the New Year. But under the weight of a bank note that could not be paid, they threw in the towel.
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Shutting down a retail operation that had been in business since 1974 wasn’t exactly how Eureka, Calif.-based, Northern Mountain Supply owners Mark Carlstrom and Alan Agapinan envisioned ringing in the New Year. But reality is sometimes a very bitter pill to swallow, and on Jan. 1, under the weight of a bank note that could not be paid, and behind on rent, Carlstrom and Agapinan threw in the towel.

Umpqua Bank subsequently served Carlstrom and Agapinan on Jan. 5, officially taking possession of the store inventory and locking the doors on Northern Mountain Supply for good.

“Things started to unravel for us three years ago,” Carlstrom told SNEWS®. “Then, in the summer of 2008, just when we began to think we could make it work, forest fires devastated Northern California, pretty much wiping out three months of sales in one of our most important sales windows.

“By the end of 2008, the economy tanked and our December went down in flames,” he added. “We tried to continue to make a go of it hoping things would turn in 2009, but it was clear by December, we were not going to make it. We were behind on our rent and Scott (Sway) gave us notice to pay up or get out. We could not pay the bank note either, so with no roof or means of generating revenue going forward, we pulled the plug.”

Scott Sway, the building landlord, founded Northern Mountain Supply on $2,500 selling surplus camping equipment. Sway sold the business to Carlstrom and Agapinan, both of whom had worked for Sway for 20 years, in 2002.

Laying much of the blame for the store’s ultimate collapse at the feet of Umpqua Bank, Sway told us, “I reminded the bank that they are directly responsible for killing the business.” Sway told SNEWS that he had tried to help Carlstrom and Agapinan re-amortize the SBA loan they had with Umpqua three years ago, but the bank declined. Even cutting rent in half did not help the store as it collapsed under the weight of bank debt. Sway told us he’s now looking for new tenants, but in this market, that it could be quite a while before he fills the space.

“We wanted to stay in business, and you’d think that after 35 years, the bank would have tried to work with us, but they didn’t,” said Carlstrom. “We just needed extra capital and we were willing to pay for it.” Instead, the store is closed for good.

As an SBA loan, Umpqua will receive 85 percent of the loan default paid to it by federal insurance.

In its heyday, Northern Mountain Supply employed 29. In the end, with less than $30,000 in inventory remaining, two part-time salespeople, a bookkeeper and the retailer’s web master, as well as Carlstrom and Agapinan, have been added to the unemployment rolls.

One former employee told us, “I am very sad that NMS has closed down. I started working there in 1987 until 1991 and back again in 1994 until they closed. It was not just a job. It was a family, a lifestyle, a lot of good times...” Now, just a memory.

--Michael Hodgson

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