Hudson's Ashley stores to file for Chapter 11 over lease

Retailer hopes to reopen store locked by landlord

Clint Engel -- Furniture Today, July 22, 2010

SANFORD, Fla. — The operators of five Ashley Furniture HomeStores in North Carolina say they will file for Chapter 11 bankruptcy protection in Florida to force the reopening of a location that a landlord has locked down.

DeShon Hodge, a partner in the licensed HomeStores with Fred Hudson, CEO of Sanford, Fla.-based furniture retailer Hudson's, said they will file today and expect to have the store reopened today, too. They would not identify the landlord or say which of the five North Carolina stores was padlocked.

"We were trying to renegotiate a lease we could live with long-term," Hudson said, but the landlord locked the store on Tuesday. Hudson and Hodge say their attorney believes it's a case of "improper termination of lease," and that the Chapter 11 filing will enable them to get back to business at the showroom.

In June, the two said they would close two HomeStores this month in Durham and Goldsboro, N.C., with plans to relocate one in a better area in the Raleigh-Durham area and possibly open a new format at the Goldsboro location. That hasn't happened yet, but Hudson said it's still the plan.

Hodge and Hudson operate three other HomeStores in North Carolina in Raleigh, Fayetteville and Clayton. They declined to disclose the stores' annual sales.

Hudson's, combined with the five Ashley Furniture HomeStores, was No. 83 on Furniture/Today's latest Top 100 ranking with estimated sales last year of $57 million.

The Hudson's business filed for Chapter 11 bankruptcy protection in May primarily to restructure real estate debt, Fred Hudson said. He said Thursday that the reorganization process was going well and the retailer still expects to emerge from bankruptcy in November.