Following several highly publicized lawsuits and a failed attempt to open larger stores, the company filed for Chapter 11 bankruptcy in 1996 and liquidated in early 1997.

[2] During the 1950s, M. Lamont Bean, president of Seattle-based drugstore chain Pay 'n Save, expressed the possibility of operating non-drugstore businesses.

[5] On September 12, 1984, The Trump Group announced that it had withdrawn its offer to purchase Ernst's parent company in order to negotiate with Sloan and Stroum.

[9] The sale left Pay 'n Save with 69 Ernst stores, three Yard Birds stores and wholesaler Northwestern Drug Co.[9] In January 1986, Pay 'n Save was renamed Seattle Standard Corp.[10] In March 1986, Hal Smith, former president of Irvine, California-based Builders Emporium, succeeded Mike Rouleau as president and CEO of Ernst.

The new concept featured garden-like nurseries, an espresso cart, wider aisles, expanded merchandise, brighter signs and other modern amenities.

[13] Three months later, Ernst sued another retailer, Seattle-based home improvement chain Eagle Hardware & Garden, for unfair competition and violation of the state's Consumer Protection Act.

[15] At the same time of the Eagle suit, Ernst went after Pay 'n Save, accusing it of illegal competition for selling nursery products in 15 Washington shopping centers the two retailers operated in.

[16] Shortly after the suits against the three retailers, the state of Washington sued Ernst on charges that it failed to objectively portray prices at competitors Pay 'n Pak and Home Club in a 1990 advertising campaign.

[16] In November 1992, Ernst filed a lawsuit against United Food and Commercial Workers Local 1001 following several months of union complaints against the retail chain.

[17] In March 1993, the union filed a class-action lawsuit against Ernst, charging the retailer with failing to pay employees for work done on their own time.

Malmo was credited with being first in the Northwest to propagate and grow his own nursery stock rather than import ornamental shrubs from Japan, the Netherlands and England.