The furniture industry has faced several financial issues that other industries have encountered, including rising labor and product costs driven by inflation, higher interest rates on their debt obligations, and fierce competition.
A slowdown in the real estate market in recent years is one of the top reasons why consumers haven’t been buying new furniture.Ā
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When people buy a new house, they often buy new furniture to go with their new residence. If houses aren’t selling, furniture isn’t either.
Related: Another popular furniture retailer files Chapter 11 bankruptcy
Furniture manufacturers have faced economic fallout from furniture store struggles. When furniture stores have difficulty selling inventory in their showrooms, they don’t purchase more products from manufacturers.
High-quality custom wood cabinetry manufacturer and retailer Worthy’s Run Furniture LLC filed for Chapter 11 bankruptcy protection on May 28 to reorganize its business.
The Hagerstown, Md., furniture manufacturing and retail company filed its Subchapter V petition, listing up to $50,000 in assets and $100,000 to $500,000 in liabilities.
The company did not indicate a reason for filing for bankruptcy in its petition.
North Carolina furniture manufacturer and supplier Progressive Furniture, which provides products to major retailers, will close down its business at the end of the year and lay off all 30 of its employees, after its primary supplier in Mexico, which provided 60% of its products, decided to close its business.Ā Progressive imports wooden furniture from both Asia and Mexico.
Progressive Furniture, a subsidiary of ready-to-assemble furniture company Sauder Woodworking, sells its products through Walmart, Target, Home Depot, Lowe’s, Amazon, Wayfair, and other furniture retailers.
The company, which operates a warehousing and distribution plant in Claremont, N.C., said it will fulfill existing orders and honor warranties until it closes. It has no plans to file for bankruptcy.
Furniture retailer has economic problems
Furniture retailers with financial problems will sometimes file for bankruptcy to reorganize their businesses to continue operating.Ā
Popular 5th Avenue Furniture Warehouse Inc. filed for Chapter 11 bankruptcy protection to restructure its debts, facing a disputed tax claim.
The Bay Shore, N.Y., furniture store filed its Subchapter V petition on June 6 in the U.S. Bankruptcy Court for the Eastern District of New York, listing $100,000 to $500,000 in assets and $1 million to $10 million in debts, including $2.37 million owed to its largest creditor, the New York State Department of Taxation & Finance.
More bankruptcy:
Iconic auto repair chain franchise files Chapter 11 bankruptcyPopular beer brand closes down and files Chapter 7 bankruptcyPopular vodka and gin brand files for Chapter 11 bankruptcy
In other cases, furniture retailers might close store locations without filing for bankruptcy.
Scandinavian Designs closes its Sioux City, S.D., location.
Image source: Shutterstock
Scandinavian Designs closes stores
Iconic furniture store chain Scandinavian Designs revealed that it will close its Sioux Falls, S.D., store location by the end of June after six years of operation, the Argus Leader reported.
Related: Another popular furniture company files for Chapter 11 bankruptcy
The Boise, Idaho-based furniture store chain reportedly informed employees on May 15 that it would close the Sioux Falls location in four to six weeks. The company called the closing a “financial business decision,” an employee said.
The Sioux Falls store opened in January 2019 in a former Toys R Us location, which closed in June 2018, as the toy store chain filed for bankruptcy and liquidated its assets.
The South Dakota closing comes a year after Scandinavian Designs closed a store in the Fair Oaks, Calif., community near Sacramento. The company has not revealed any plans to close additional stores or to file for bankruptcy.
Scandinavian Designs did not immediately respond to a request for comment.
Scandinavian Designs, which also operates The Outlet byĀ Scandinavian Designs andĀ Dania Furniture, was established in 1963 in San Rafael, Calif. The company currently operates 47 stores in 15 states, stretching from California to Maryland.
Related: Iconic furniture chain shuts troubled store, no bankruptcy plans
