Krause's liquidation sales under way
By Clint Engel -- Furniture Today, October 14, 2001
BREA, Calif. — Krause's Furniture is going out of business after two bids to rescue the custom upholstery manufacturer-retailer failed.
Buxbaum Group of Encino Calif., has been hired to liquidate inventories of the 57 Krause's Custom Crafted Furniture and Castro Convertibles stores that remained open after a Chapter 11 bankruptcy filing in July. All machinery and equipment at Krause's 250,0000-square-foot factory here also will be liquidated.
Sales began last week at 43 stores, seven Castro locations in New York and New Jersey and 36 Krause's in California, Washington, Arizona and Colorado. The sales will include inventories from 14 stores that were recently closed.
When Krause's filed for bankruptcy, it cited current economic conditions as the primary cause. The company had not made a profit since 1994.
At the time of the filing, the Top 100 company closed 32 of its 89 stores. A group of investors led by management had hoped to buy the remaining 57 stores and the factory to continue operations. The Hakakian Group later emerged as another possible buyer.
An agreement with the potential buyers could not be reached, said David Ellis, chief operating offer of Buxbaum. "Accordingly, the company had no choice but to liquidate," he said.
Buxbaum generated about $3.7 million in sales from the recently completed first round of closings, Ellis said. The new GOB sales will run for six weeks and are expected to generate $8 million to $9 million, he said.
He did not have an estimate on what amount the factory equipment might bring. Krause's executives have not returned repeated telephone calls.
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