The kamaaina owners of Price Busters said they are closing all eight Hawaii stores next month after pumping in more than $3 million to keep the discount retailer afloat over the past three years.

Retail Partners Hawaii, a venture formed in 2010 by real estate developers The MacNaughton Group and Kobayashi Group to purchase the locally owned chain out of bankruptcy, said it has worked "diligently to fund the business and manage operations in an attempt to turn it profitable," but failed to drive margins sufficiently to cover the increasing costs of business. It will lay off about 190 employees when the Oahu outlets, including two Let’s Party Hawaii stores, close.

"The seasonal promotional windows were not enough to drive top line revenue, while revenue and margin were also being diluted by increased competition," Jeff Arce, partner and chief financial officer at The MacNaughton Group, said in a statement.

Other key factors the company cited were ongoing increases in operating costs — including utilities, occupancy, health care, shipping and other benefits — and seasonal "pop-up stores"and online purchasingthat have alsosignificantly cutintobusiness for PriceBusters.

"Theownership group has funded significant cash flow losses while we attempted to turn things around," Arce added. "The resultshavebeendisappointingforeveryone."

Price Busters, established in 1992, plans to liquidate all merchandise over the holidays and said it will heavily discount items until everything is sold. Price Busters said via Twitter that all merchandise will be 25 percent off until Dec. 19 at all locations.

The company said it has notified all workers that the stores will close by mid-January.

"Of course this was an incredibly difficult decision, and you never want to put people out of a job," Arce said. "Ironically that is one of the reasons we bought the business in the first place. We did save jobs and kept rent in place for three more years and we invested a lot of money doing so, but of course we still feel bad for everyone."

In recent months Price Busters has added to its selection of merchandise. Most notably, the stores have begun selling large furniture items.

"I think it was a mistake for them to have food products and furniture," said Thomas Wang, who shops at Price Busters for its inexpensive party favors. "They are in the budget market for small household decorative items and inexpensive party toys, and they should have focused on that. I, for one, would never buy any edible items or large furniture from there. But when I need to buy cheap party favors, my choices of vendors will be down by one."

Retail Partners in 2010 purchased substantially all the assets of ERT Sales of Hawaii, the previous owner of Price Busters and Let’s Party Hawaii stores, which filed for Chapter 11 bankruptcy protection in January of the same year after an expensive expansion amid an economic downturn.

ERT founder and former president Beth Tom said, "I’m extremely sad about it. We have 190 people who are going to be looking for employment, but (Retail Partners) did everything they could do to keep it afloat for the last three years."

Tom now operates two Santa’s Wrap Christmas stores in Las Vegas.

"My biggest sadness is the employees," she said. "We had wonderful staff. Some people had been there 20 years. It breaks my heart to see a company that you create go down. Price Busters is a household name in Hawaii. Price Busters filled a niche and it’ll be a great loss."

Retail Partners said it will pay its suppliers with the proceeds from its liquidation in hopes of avoiding another bankruptcy.

"Many times a bankruptcy filing is necessary in this kind of situation but we are hopeful that we can avoid this since that will basically divert the company’s remaining resources, as well as the creditors’ resources toward legal and other costs that will not benefit any of the current creditors," Arce said.

Retail Partners also has been involved in retail mall development and running chains, including Blockbuster Video, Starbucks, Jamba Juice and P.F. Chang’s in Hawaii.