This Beloved Furniture Chain Is Closing All But 1 of Its Stores
A lot of factors led to this company filing for bankruptcy.
For many home improvement and home goods stores, 2020 saw business boom with all the nesting Americans have been doing. In fact, Statista reports a 79 percent growth in home furnishing retail sales from April to May of 2020, and another 37 percent from May to June. But while stores like Home Depot and Lowe's have also seen sales soar, one furniture retailer has not been so lucky. Loves Furniture recently filed for Chapter 11 bankruptcy protection, making it the latest retailer to suffer the effects of COVID-19, lockdowns, and the related battering that the economy has taken. Read on to learn more about the sole surviving Loves Furniture, and for another similar chain closing up multiple shops, check out This Beloved Home Goods Chain Is Closing More Than 40 Stores.
Loves Furniture—with its mission statement of "Love where you live"—was a newly created company that took over many of the locations left shuttered when Art Van Furniture went bankrupt in March 2020. Originally starting with 34 stores in Michigan, Ohio, and Pennsylvania, Loves Furniture is expected to scale down to just one store in Michigan post-Chapter 11, which they filed on Jan. 6.
The company's CEO Mack Peters told the Detroit Free Press that the last year has seen disruptions to supply chains caused by the COVID pandemic. "There were certainly a lot of factors involved in what happened," Peters said. "We had to delay a lot of store openings because we didn't have goods." Details in the bankruptcy filings also explain how the company was unable to gain access to the former Art Van warehouse until October because it was still being used for the Art Van liquidation sales.
Loves Furniture hired Penske Logistics Services to manage the warehousing issues, with costs apparently spiraling as the brand was on the hook for paying for multiple deliveries to the wrong stores, half-full delivery trucks, and lost inventory. The two companies eventually sued each other in a case that is ongoing.
With logistics and supply issues persisting, Loves Furniture's first announcement at the end of December that they would be closing around a dozen Michigan stores led to a wave of canceled orders by customers who were no longer confident that they would receive their delayed items. "Customers' uncertainty as to whether Loves would remain in existence led to numerous cancellations to the point where daily cancellations often exceeded daily sales," Peters said in the court filings.
Loves Furniture is currently holding around $27 million worth of unsold inventory. All 13 of its remaining stores are planning to hold large sales to free up cash flow, and allow the reorganization of the business to continue so that Loves Furniture can trade on, smaller but healthier.
Keep reading for other beloved stores in trouble, and for more on the latest news in retail, check out This Iconic Department Store Is Closing Another 40 Locations.
Read the original article on Best Life.
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