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.
Starting the year off on a somber note, Family Video, one of the last relics of the movie rental scene, announced on Jan. 5 that all of its stores will be closing. The news came just three months after nearly half of the 510 Family Video locations the company had at the beginning of 2020 were shut down. "While we have faced digital competition from Netflix and others for years, nothing has been as devastating to our business as COVID-19," Keith Hoogland, the CEO of Family Video's parent company Highland Ventures, said in a statement. The remaining 250 Family Video stores are set to close after their current liquidation sales. And for more regular retail news sent right to your inbox, sign up for our daily newsletter.
Gym chain In-Shape, a 40-year fixture of California's fitness scene, announced on its website that it was filing for Chapter 11 bankruptcy protection on Dec. 16. "As you know, California's mandated shutdown of gyms has kept us closed for the better part of 2020," the statement read, noting that the statewide shutdowns have "dramatically impaired [In-Shape's] revenue." In-Shape expects to come out of its restructuring "with a smaller, more focused portfolio of about 45 clubs across California," although it didn't specify which locations were likely to survive. And for another company in trouble, read up on why This Iconic Chain Is Closing Over 1,000 Stores by March.
Once-ubiquitous clothing and accessories store Francesca's first announced it was filing for Chapter 11 bankruptcy protection in December, and soon, the company revealed that it was closing 97 stores across the country. The news followed a November announcement that 140 locations would shutter, meaning more than a third of Francesca's 700 locations are shutting down. And for another brand making big changes, check out This Iconic Clothing Chain Is Closing Its Biggest Stores.
Punch Bowl Social
In late December, the "eatertainment" chain Punch Bowl Social, which had 20 locations nationwide, announced that it was filing for Chapter 11 bankruptcy. "In a now too-familiar tale, the debtors' businesses were immediately and significantly adversely affected by COVID-19," Punch Bowl Social said in its bankruptcy court filing, according to Restaurant Business Online. "Unfortunately, because of restrictions limiting the number of patrons at each venue, as well as the public's uneasiness of going out to eat or drink in public during a pandemic, each of those venues was losing money on a daily basis." And for another classic eatery that's in danger, check out This Beloved Restaurant Chain Just Filed for Bankruptcy.