When a private equity firm bought Pike Family Nurseries in 2004, it was supposed to fertilize the family-run chain with the cash and resources to allow Pike to bloom across the Southeast.

Instead, by November 2007, Pike's ambitions had wilted. The Norcross-based chain was bankrupt.

The prolonged drought in Georgia hurt, said Jeff Morey, a former consultant to Pike who also produces the trade publication Nursery Retailer.

"But the problems started a long time ago, before the rain stopped in Atlanta," he said.

For several who have watched Pike's slow slide, the drought was just one of many factors that may have weakened the 50-year-old homegrown garden retail chain. Morey said Pike expanded too aggressively, invested too little in older Atlanta stores, and used 40-year-old merchandising techniques.

At the same time, under its private owners, Atlanta-based Roark Capital Group, Pike sold off its largest asset – many of its Atlanta store sites – and took on pricey leases.

Through a bankruptcy auction, a scaled-down Pike retail chain has landed a new owner with more drought and merchandising experience, Glendora, Calif.-based Armstrong Garden Centers. The wholesale business was sold to three new owners.

Like past owners, Armstrong President and CEO Mike Kunce said he wants to open more Pike stores locally and in the Southeast. But all that will depend on when the drought stops in Georgia.

Morey said he saw problems at Pike even before the family sold most of its ownership in the chain for an undisclosed price to Roark in 2004. Morey was hired as a consultant after the sale. Among the many problems, he said, was the way the chain displayed plants on the ground where customers have a hard time seeing and appreciating them.

"It was not industry standard for 40 years," Morey said.

Scott Schnell, who became Pike's CEO under Roark's leadership, said in an interview last month that he saw problems when he joined the company in early 2007.

"The company had gotten tired," Schnell said. "I think people were somewhat on auto-pilot. I think it needed a kick in the pants."

The Pike family had been anxious to expand in the Southeast and the purchase by Roark offered a way to help pay for that drive. With Roark's backing, Pike opened stores in the Birmingham and Charlotte areas. Morey said that while the chain spread, it never really fixed problems with the stores in Atlanta.

"Many of the older stores didn't keep up with modern merchandising," he said. "The stores started looking ratty and falling apart."

Roark has about $1.5 billion under management, according to its Web site. Its portfolio includes businesses such as Moe's Southwest Grill, Schlotzsky's, Cinnabon, Money Mailer and Carvel.

Roark says on its Web site that it offers advice to companies it acquires but leaves responsibility for running the business solely in the hands of each company's executives.

In the case of Pike, the chain's founding family retained just a 3 percent ownership stake. But they remained involved in the business. Founder William "Pete" Pike kept an office at the company's headquarters in Norcross. And one of his sons, Randy Pike assumed direct leadership of the company, serving through early 2007 as chief executive.

That changed in early 2007, when Roark brought in Schnell. Randy Pike promptly left the business.

Schnell said he tried to shift the chain's culture to be more open to change. He said he hired a merchandising expert with experience beyond plants, believing that the company's future should include more hard goods — like outdoor grills — and services.

But Schnell said the company's finances were slammed last year by a double hit: a freeze in April and a drought that sparked local and state restrictions on outdoor watering.

According to Pike's bankruptcy attorney, Rob Williamson, the drought dried up 50 percent to 60 percent of sales in the last six months of 2007. In 2007, according to Nursery Retailer magazine, Pike was the top ranked independent U.S. garden chain, with $91 million in sales, followed by Armstrong, with $84.1 million in sales.

When Roark bought Pike four years ago, it was a land-rich company. But soon after the deal, Roark began selling off Pike store sites, then leasing the land back. That move allowed the company to come up with large sums of money. A 5.3 acre tract off Holcomb Bridge Road in Alpharetta sold for $4.5 million, according to county records.

Another off State Bridge Road went for $3.5 million. A Roswell Road store site in Buckhead sold for $3.9 million.

It's unclear whether any of the money generated from the land sales was put back into Pike to bolster the business. An official with Roark did not respond to requests for comment.

What is clear is the maneuver left Pike with added expenses for monthly leases.

Schnell, who joined the company after the land sales, said one advantage of Pike's bankruptcy filing was to allow the company to shutter stores and "walk away from some leases."

He declined to comment when asked whether the earlier sale-lease strategy had significantly weakened Pike's cash flow and increased the risk of an eventual bankruptcy.

Despite the bankruptcy auction, some of Pike's creditors still haven't been paid. And that has led some to examine the chain's relationship with Roark. A creditors committee recently asked for a court order requiring Roark and its affiliates to turn over detailed information about Roark management fees and earlier sales of Pike land.

The committee wants to see whether moves by Roark and its affiliates sped Pike's demise and "whether it [Pike] was bled of funds," said Karen White, an attorney who represents Pennington Seed, a Madison, Ga.-based vendor that is part of the creditors committee.

The bankruptcy judge hasn't ruled on the motion.

Meanwhile, even as Armstrong maneuvered to buy Pike's retail operations, it rushed to renegotiate leases in Atlanta and cut future expenses.

"The landlords helped us out with some concessions to get us through the drought," said Armstrong's Kunce.