Georgia cracks down on furniture GOB sales

Says retailers violate 90-day state limit

Clint Engel -- Furniture Today, June 4, 2009

ATLANTA — Georgia authorities have cracked down on three home furnishings retailers that allegedly dragged out going-out-of-business sales beyond the 90-day state limit.

The Georgia Governor's Office of Consumer Affairs said it entered into settlements with Cyrus Fine Rugs of Atlanta; Furniture World of Dallas in Dallas, Ga., and Ben Haverty's Furniture-Xpress in Chamblee, Ga.

Cyrus allegedly conducted a GOB for nearly six months, the state said. It agreed to pay $25,000 for Office of Consumer Affairs administrative expenses and to cease retail operations. Furniture World ran a GOB for more than four months and augmented its inventory from an affiliated store, the state alleged. It also agreed to cease operations and pay $10,000.

OCA also alleged Ben Haverty's ran a GOB for more than 90 days and that when investigators put the business on notice, it reopened as an outlet, but continued to use the word "liquidation" on receipts and other materials. Under its settlement, the retailer is paying $5,000 and "agreed to modify its sales practices to comply with the Fair Business Practices Act," the Office of Consumer Affairs said.

"What we see occurring is companies that have no intention of closing up shop holding going-out-of-business sales as a strategy to increase store traffic," said Joe Doyle, OCA administrator.

In addition to the GOBs going beyond the 90-day-limit set by state law, some stores have been augmenting their inventories during liquidation sales, which also is against state law, an OCA spokesman said.

That practice, however, is common in liquidations after retailers file for bankruptcy protection. In those cases, the spokesman said, state regulations are sometimes trumped by the federal bankruptcy court rulings.