Suppliers, employees, competitors help Robb & Stucky customers

More than $13 million in deposits on furniture owed

Clint Engel -- Furniture Today, March 28, 2011

FOR MYERS, Fla. — Robb & Stucky's suppliers, employees and competitors are trying to pick up the pieces for customers who paid millions in deposits to the retailer but didn't receive their furniture before the Top 100 company's bankruptcy filing last month.

The more than $13 million in customer deposits noted in Robb & Stucky's bankruptcy case represented about $28 million in business, according to a source familiar with the Feb. 18 filing and a failed effort to keep the business going, who declined to be identified. The source told Furniture/Today there were more than 4,200 customers with deposits that averaged $3,000.

"It's unfortunate and that customer does get hurt," said Jim Schaye, CEO of Hudson Capital Partners, which is leading the liquidation sales at Robb & Stucky's 20 stores in Florida, Texas, Arizona and Nevada.

He said the liquidators are in no position to help, nor are they required to assist the customers, though Hudson Capital is advising those who paid by credit card to file claims with the credit card providers.

But others in the industry are stepping up to help customers, including suppliers such as Marge Carson and Century and high-end Florida retail competitor Baer's, along with Robb & Stucky employees and former executives of the Fort Myers, Fla.-based chain.

Most won't disclose details of what they're doing, partly because each consumer's situation is different and those helping don't want to come off as if they are favoring one customer over another.

But their position is clear: This bankruptcy and others like it have left a bad taste in the consumer's mouth for the furniture industry, and they are trying to turn that around and protect the image of their own brands.

"The consumers are panicked and have sort of a deep level of distrust now," said Century President and CEO Alex Shuford. "That's the travesty of this whole thing or any ... retail bankruptcy."

He said Century is trying to help in situations where the product was produced but not delivered, and is working with customers whose orders never made it to Century.

"The first step is just listening to them and trying to console them," Shuford said, adding that the response to the bankruptcy is as much an exercise in therapy for the consumer as anything else.

Jim LaBarge, CEO of Marge Carson, one of Robb & Stucky's largest unsecured creditors, said his company has been responding to customers and asking for copies of invoices.

"For the most part, we've been able to work with the customers who are still interested in getting their order, and they've been very positive about our outreach," he said.

In most cases, customers have deposited up to 50% of the purchase price, and Marge Carson is trying to fill that order without losing money or by taking just a small hit after shipping.

"We're doing whatever we can and come close to breaking even. If we have to, we're willing to bend," he said, to satisfy the customer and avoid damaging the company's name.

Meanwhile in the stores, Robb & Stucky designers - who haven't been paid on goods on order but not delivered prior to the bankruptcy - are spending time on the telephone to bring customers together with suppliers willing to help.

"A lot of reps have come forward," said one Florida designer who asked not to be identified. She said Century and Hancock & Moore were examples of vendors who "have been incredibly giving."

"Just the fact that manufacturers are doing that is an incredible situation - in tough times when they're probably having difficulties of their own," she said. "People have gone above and beyond to try to make a bad situation not as bad for certain people."

Robb & Stucky President Fred Berk said he and CEO Clive Lubner "are committed still to getting as much of this (product) delivered as we can," although he also declined to elaborate. "It's the right thing to do," Berk said.

Pompano Beach, Fla.-based retailer Baer's has been offering Robb & Stucky customers special pricing, with some help from vendors, said Senior Vice President of Sales Jerry Baer.

"We're trying to do whatever we can to mitigate their losses and (maintain) a more positive feeling toward the furniture industry as a whole," he said. "Obviously, we're hoping these customers will buy from Baer's in the future."

Baer's also has been interviewing Robb & Stucky designers and hopes to hire some.

While it can be argued that Baer's could gain from Robb & Stucky's downfall long-term, Jerry Baer said he doesn't see it that way.

"We're not happy about this at all," he said. "It's a real sad situation for our industry."

Hudson Capital's Schaye said the liquidation sales were are off to a "robust start," and should wind down in 10 to 12 weeks. He placed the retail value on the inventory the liquidators purchased at about $104 million, but declined to say how much money the sales are projected to raise.