The home furnishing retail sector is experiencing an extreme makeover of sorts with a rise in bankruptcy filings. Fortunoff Fine Jewelry & Silverware LLC, Wickes Furniture Co. and Wickes Holding LLC announced Feb. 4 that they filed for Chapter 11 joining a bevy of other home furnishing retailers that have filed for bankruptcy recently.
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The battered home furnishing sector has already seen Domain Inc., Scan International Inc., Bombay Co., Peoploungers Inc., Levitz Furniture, Seasonal Concepts Inc., Sofa Express Inc., Waynesborough Furniture Inc. and Syroco Inc. file for bankruptcy over the last couple of months. (See list below of recent home furnishing bankruptcy filings.) The Deal's senior writer Shanon D. Murray in her piece Trickle-down economics: Many feel housing pain pointed out that the volume of furniture companies entering bankruptcy has been so high that Sofa Express, for example, moved the bid deadline for its assets back one day to accommodate Levitz's auction.
The slowdown in the real estate industry, intense competition from new retailers and a looming recession have combined to form a perfect storm, hobbling the home furnishing sector. According to a report from First American Core Logic, foreclosures rose 22% since Jan. 27, and the U.S. Census Bureau says December 2007 new home sales dropped 26% from the same year-ago period, translating into the biggest decrease since the statistic was first tracked in 1963. Meanwhile, low-cost retailers that sell a wide variety of products such as Target Corp., Bed Bath & Beyond Inc. and Wal-Mart Stores Inc. have moved into home furnishings, eating into the revenues of exclusive furniture retailers. As for the U.S. economy, forecasters are predicting a recession that would tighten the wallets of the U.S. consumers and, most likely, hurt home furnishing retailers.
The future of the home furnishings sector looks bleak with potentially only more bankruptcies to come. For those that remain, consolidation and acquiring distressed assets may be the only answer for survival. H Acquisition LLC, for example, served as a stalking-horse bidder in a bankruptcy auction, paying $80 million for Fortunoff's assets. - Gerald Magpily
Home furnishing retailers' bankruptcies
|
|
The Date |
The Action |
| 2.04.08 |
Fortunoff Fine Jewelry & Silverware LLC files for Chapter 11. |
| 2.04.08 |
Wickes Furniture Co. and Wickes Holding LLC. |
| 1.22.08 |
Domain lands in bankruptcy. |
| 12.28.07 |
Scan International files for Chapter 11. |
| 12.06.07 |
Sofa Express goes bankrupt. |
| 11.09.07 |
Levitz goes bankrupt, again. |
| 10.11.07 |
Seasonal Concepts files for Chapter 11. |
| 9.20.07 |
Bombay goes bankrupt. |
| 9.17.07 |
Waynesborough files for bankruptcy. |
| 7.23.07 |
Syroco files for Chapter 11. |
| 5.15.07 |
Peoploungers files for bankruptcy. |
| 4.04.06 |
Off Main Furniture Inc. files for bankruptcy. |
|
Source: Bankruptcy Insider Database |
