When people move into a new home they tend to also buy new furniture. However, with the recession and housing market crash, not as many are out buying new couches and tables for their home. Because of this, furniture sales in Florida have decreased, leaving many furniture retailers with no other choice but to file for bankruptcy in the hopes of restructuring.
The most recent retailer to file for Chapter 11 bankruptcy was Carls Furniture Inc. As of now the company has just seven locations in Florida, as two underperforming stores were already forced to close earlier this year.
According to the filing, Carls Furniture has been $1,000,001 to $10 million in liabilities, with between 200 to 999 creditors. Of the top 20 creditors, American Drew, a La-Z-Boy company, is owed $103,440, and Klaussner Furniture is owed $366,682.75.
Furniture Land, which is the parent company to Carls Furniture, recently released a statement that the bankruptcy plan is to close unprofitable stores in the next 60 to 90 months, and then pay reduced rent on the stores that are still making a profit.
Of the 150 employees working for Carls Furniture, those who work in the profitable stores will remain employed, which means that this bankruptcy could mean unemployment for some Florida residents who currently work at those underperforming stores.
The bankruptcy announcement of Carls Furniture comes just months after another Florida-based furniture retailer, Robb & Stucky, was sold to a liquidator after filing for bankruptcy in February. Before being sold, Robb & Stucky had 20 locations.
Source: Sun Sentinel, “Carls Furniture Inc. files for Chapter 11 protection from its creditors,” Arlene Satchell, 24 May 2011