By Lori Ehde
Luverne True Value owner Mark Novotny spent much of his day Monday seeing each of his five employees, laying them off one at a time.
He and his wife, Beth, have decided not to rebuild their business after a Dec. 7 fire destroyed much of the building and inventory.
"We got the numbers back from the insurance company, and we can see it's not enough to go on," Novotny said Tuesday.
"I spent yesterday letting my employees know. They were all good employees. I can't say enough good about them."
In addition to him and his wife, Beth, also employed at True Value were Jan Van Eck and Lois Hatting, both of Luverne, Carol Dohlmann, Magnolia, and Gert Steinberg, Hills. High School student Merrick Van Otterloo, Luverne, also worked after school and summer hours.
He said it wasn't an easy decision, but the deciding factor seemed to be an insurance clause that allows reimbursement of 25 percent over the limit for loss during peak business times.
In the past two years, Novotny said peak season for True Value has been May and June when the store was busy with rental equipment, lawn and garden supplies, paint and bridal registry gifts.
"Up until three years ago, peak season was November and December," Novotny said. "Now it's my second-busiest season."
The bottom line, Novotny said, is that insurance, which he carries through Auto Owners in Michigan, won't cover costs of starting over.
"I'll be able to pay all my bills, and I'll basically get back all the money I put into it," Novotny said.
"But I had more inventory at the time than I was insured for, and I'll take a loss on that."
Damage was originally estimated at more than $600,000 on the building and contents destroyed at a time when shelves and storerooms were overstocked for holiday sales.
A new freight shipment worth about $8,000 had just arrived the night before the fire and included $1,200 worth paint.
He said he'll be busy this week with a salvage company that comes in with buyers. "Some of that paint is salvageable, but I'll be lucky if I get 10 cents on the dollar I paid for it," Novotny said.
What also made a difference in the Novotnys' decision not to rebuild was learning many of their personal investments in the store were not covered by insurance.
"When I bought the business, I bought it as a package," he said. But through the years, he's added shelving and other improvements that would need to be purchased all over again if he were to rebuild.
"Nobody thinks about all those little fixtures you buy," he said. "It's considered personal property, and you don't think about that when you're insuring the place."
Also not covered was a $7,000 paint mixing computer. "I didn't think about adding that to the policy," Novotny said.
Hard drives from melted computers were sent to a company that was able to retrieve information, so Novotny said he has all his records and has been able to close accounts and pay and collect bills.
"If someone comes forward wanting to start a hardware store, I've got all the information," he said.
The Novotnys have owned the Luverne True Value store for six years. He said he's unsure what his next job will be.
"I've got a lot of skills that I think are pretty marketable," he said. "But this will all take awhile, so at this point I haven't even started looking for a job yet."
He said his farming background in South Dakota taught him to be a self-starter and do-it-yourselfer, which made him a good match for a hardware business.
He came to True Value in 1995 after 12 years as a software specialist with Berkley Information Services.
Novotny said his family is taking the tragedy in stride and dealing with it one day at a time. "The hardest part was driving up on the fire and seeing it and realizing everything is upside down and not knowing what to do next," he said.
He said it helps to be living in Luverne. "The community support has been phenomenal," he said. "I've had so many people stop out to ask what they can do."
He added the area True Value stores have been supportive as well.
Investigators say the fire was started to mask a robbery in which the company's safe was stolen along with $1,200 in it.
A $2,500 reward is offered by the Minnesota chapter of International Arson Investigators for information leading to the identification of persons responsible. The arson hotline is 1-800-723-2020.