The furniture sector has struggled since the Covid-19 pandemic’s start in 2020, with supply chain issues, followed by a decline in demand for home decor as housing sales declined in 2022 and 2023, caused by rising interest rates.
Inflation over the last three years resulted in rising costs of inventory that forced an increase in prices and discouraged consumers from purchasing merchandise.
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The financial distress that furniture chains faced over the last three years led to store closings, bankruptcy filings, restructurings, and liquidations.
Related: Major airline handing company to lenders in Chapter 11 bankruptcy
The parent company of upscale furniture and home decor retailer, Z Gallerie, which operated 21 stores in nine states, filed for Chapter 11 bankruptcy protection in October 2023 as supply chain and import cost increases in 2021 and 2022 severely impacted its brand profitability and liquidity.
Unable to secure critical financing to continue business operations, upscale furniture chain Mitchell Gold + Bob Williams ceased operations on Aug. 26, 2023, and closed 27 stores in 14 states. It then filed for Chapter 11 bankruptcy on Sept. 6, 2023. A month later, it converted its case to Chapter 7 liquidation.
Home furnishings and design company Surya on Nov. 14, 2023, completed the acquisition of the Mitchell Gold + Bob Williams intellectual property, inventory, and manufacturing equipment in a bankruptcy sale.
The company, however, relaunched the brand Oct. 24-28, 2024, at the High Point Market in its showroom at the International Home Furnishings Center. The center is in High Point, N.C.
Furniture and mattress retailer The RoomPlace on Feb. 2, 2024, filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Northern District of Illinois to restructure its debts and close several of its stores, blaming declining retail sales across the country and other challenges in the furniture industry.
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The Lombard, Ill., furniture retail chain with 26 locations closed six stores in the Indianapolis area, one in Kenosha, Wis., and one in Peoria, Ill., and planned to concentrate on strengthening its remaining 18 stores in Chicagoland.
BoConcept franchisee files for Chapter 11 bankruptcy.
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BoConcept retailer files for Chapter 11 bankruptcy
Finally, the operator of BoConcept furniture retail stores in South Florida on Nov. 15 filed for Chapter 11 protection in the U.S. Bankruptcy Court for the Southern District of Florida in Fort Lauderdale seeking to reorganize its business.
The Hallandale, Fla., franchisee of five BoConcept locations, which listed $500,000 in assets and $1.5 million in debt in its Subchapter V filing, said that financial distress caused by the Covid-19 pandemic, skyrocketing rents, supply chain delays, and inflation led to its bankruptcy filing, NewsBreak reported.
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The retailer, BC Aventura Contemporary Furniture, once had big plans to expand its chain of the Danish modern furniture brand in Florida starting with a sixth store in 2023, but declining sales and mounting debt forced it to close three stores and continue operating just two in Fort Lauderdale and Hallandale Beach.
Sales have declined since 2022
The franchisee owes $800,000 to BoConcept for inventory and $150,000 for unpaid rent on its existing and closed store locations. The debtor, which reported $5.1 million in sales in 2022, has faced a decline in revenue in 2024 so far with $3.3 million in revenue.
BoConcept was founded in 1952 and has grown into a leading global furniture retailer with over 300 franchised stores in over 60 countries. BCÂ Aventura Contemporary Furniture’s financial problems do not reflect the performance of the global brand, which reportedly thrives in other markets.
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