Suppliers limit BHFC shipments
By Clint Engel -- Furniture Today, July 26, 2004
Lancaster, Pa. — The fate of Breuners Home Furnishings Corp. was in question last week as some key suppliers said they had restricted shipments to the Top 100 company, whose CEO said it is studying its "strategic options."
Three key suppliers, asking not to be identified by name, confirmed that the Lancaster, Pa.-based BHFC has stopped payments for product or that the vendors have either stopped shipping or restricted shipping to a cash-in-advance payment basis.
One supplier said BHFC started stretching the allowable window for payment on already-shipped goods about 30 days ago. For the past two weeks, the supplier has shipped only after receiving cash in advance.
"We've been told they stopped paying all suppliers," another supplier said.
Breuners CEO Joe Reddington declined to comment on the shipping and payment issues, but said the company is "examining all of our strategic options."
"We've been having discussions for several months with potential financial and strategic buyers," he said, adding, "This is the culmination of that process."
While rumors of a possible bankruptcy filing swirled through the industry last week, Reddington declined to elaborate on the options BHFC is considering.
The 47-store BHFC, which operates Huffman Koos and Good's Furniture in the Northeast and Breuners in northern California, is ranked No. 23 on Furniture/Today's survey of Top 100 U.S. furniture stores, with estimated furniture, bedding and accessory sales of $323 million in its fiscal year ended Jan. 31. That was down 10.7% from $361.8 million the year before, at the same number of stores.
Reddington said BHFC is running a sales increase for this year, including July, "but we still see it as a relatively difficult environment out there, and I think that's true for just about everybody I'm talking to."
BHFC, which once aimed to become a conglomerate of upscale retailers doing $1 billion in annual sales, is majority owned by Apollo Management LP.
Charlie Eitel, chairman and CEO of BHFC supplier Simmons, declined to comment on the bedding producer's shipping and payment arrangements with the retailer, but said he was aware of BHFC's situation.
"If they don't make it, it will be a shame because they're good guys," he said.
