Texas furniture retailer Lack's Stores to shut down
November 15, 2010-- Furniture Today,
According to a press release e-mailed to Furniture/Today by President Melvin Lack, the promotional, credit-oriented Top 100 company suffered from the recession but eventually returned to profitability.
In the release, Lack's noted that is has financed customer accounts throughout its 73-year history, borrowing funds from banks and other lenders to finance the receivables.
But now, "The lenders have informed the company that they no longer wish to lend money on consumer receivables," the company said. "They have demanded repayment of the loan, and this has resulted in the necessity of this current action, notwithstanding our company's strength, viability and profitability."
The company said it will conduct store closing sales at all locations over the next 45 to 75 days. Melvin Lack could not be reached immediately for additional comment, including the expected timing of the Chapter 11 filing.
Before the 2008 recession, Lack's annual sales exceeded $200 million in 39 stores and it employed 1,200 associates, the retailer said.
"After the recession began in 2008, the company experienced a 20% drop in sales and was forced to make dramatic cuts in expenses, including the termination of 300 of its associates," it said. Thos efforts helped return the company to profitability and it continued to be profitable this year, the release said.
Lack's is No. 51 on Furniture/Today's Top 100 with 36 stores in central, southern and western Texas and estimated furniture, bedding and accessories sales of $101 million in 2009.
Among the closing stores are five in San Antonio, three in Austin, two each in Corpus Christi, Victoria and Lubbock, and one each in Beeville, Sinton, Portland, Alice, Bay City, Clute, El Campo, Port Lavaca, New Braunfels, College Station, Midland, Odessa, Temple, Killeen, Waco, San Angelo, Abilene, Tyler, Lufkin, Del Rio, Uvalde and Longview, Texas.
Lack's was founded in 1938 by Dave and Rebecca Lack when they purchased a 900-square-foot auto supply store in Beeville. In 1941, they purchased a store in Victoria and the family moved to that city.
During World War II, Lack's had a difficult time getting products made of rubber and steel because of the war effort, and added furniture as a way to boost its sales. The move was a successful one and was followed by the addition of appliances and electronics. In the 1970s, auto supplies and other small items were phased out.