The furniture retail industry has faced challenges this year that have impacted both independent and chain stores’ ability to remain in business.
One of the top economic issues for furniture stores has been a slowdown in the real estate market in recent years, which has curtailed consumer spending on new furniture. When people buy that new house, they often will seek out new furnishings for each room in their home.
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If consumers are not buying homes, they likely aren’t buying furniture, as well.
Related: Another popular furniture company files for Chapter 11 bankruptcy
Fierce competition among furniture chains and independents has also forced retailers to spend more on advertising to showcase their products to consumers, which also cuts into profits.
Independent furniture retailers have a major challenge to compete against well-known national retail chains like Ashley Furniture, Bob’s Discount Furniture & Mattress, and Ethan Allen. Independent retailers have a mountain to climb to attract business away from the big-name chains whose names consumers are familiar with.
Depressed furniture sales have also affected the manufacturing sector as several providers of products have shut down operations, and in some cases, filed for bankruptcy.
Furniture manufacturers face economic distress
North Carolina furniture manufacturer and supplier Progressive Furniture, which provides products to major retailers, has decided to 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.
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.
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 petition indicated that funds would be available for distribution to unsecured creditors.
The company did not indicate a reason for filing for bankruptcy in its petition.
5th Avenue Furniture files for bankruptcy
And now, popular Long Island, N.Y., retailer 5th Avenue Furniture Warehouse Inc. filed for Chapter 11 bankruptcy protection to restructure its debts, facing a disputed tax claim.
Related: Major health care provider files for Chapter 7 liquidation
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.
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The 5th Avenue Furniture chain currently only operates a single location, having closed two other stores in Shirley, N.Y., and Medford, N.Y., in recent years.
The debtor sells furniture products from major manufacturers and distributors, including Ashley Furniture, AC Pacific Corp., and Holland House.
Related: Popular restaurant chain files bankruptcy, closes locations
