UPDATE: Linder's Furniture to close following going-out-of-business sale
Clint Engel -- Furniture Today, November 16, 2011
GARDEN GROVE, Calif. — Linder's Furniture will close its doors for good following a going-out-of-business sale beginning Thursday, citing a lending squeeze and a business climate that continued to deteriorate.
The company based here said the sale of more than $20 million worth of inventory will be held in all 11 Southern California locations - including its higher-end Legacy Furniture in Rancho Mirage, Calif. The sales are being managed by a joint venture between liquidators Gordon Bros. Group and APJL Consulting.
"Considering the holiday season has just started, we expect this be a very short sale, and popular items will sell out fast," said Craig Venezia, Gordon Bros. spokesman.
Linder's President Eric Foucrier added that he expects the sale will continue into the "early part of next year," while founder and CEO Phil Lender said he's hoping the liquidation generates about $25 million in sales so that vendors have "a chance of getting something back and I don't have to throw more into the pot," to pay off the lender Marquette Bank.
Linder said he is by far the largest creditor, owed more than $4 million. He would not disclose how much is owed to industry suppliers or the bank.
Linder's entered into an alternative to bankruptcy called a "General Assignment for the Benefit of Creditors" Nov. 2, and talk of a complete liquidation has been circulating the industry since the High Point Market.
"Its been a battle for the past few years, working through the bad economy and sort of hoping next month, next quarter, next year it will get better," Linder told Furniture/Today.
He said "things started getting a little shaky" in 2007, after the retailer took on debt to acquire Legacy Home Furnishings in Cathedral City, Calif., and as competition heated up with the likes of Living Spaces, Ashley Furniture HomeStores and Mathis Bros. moving into the market.
"We kind of became the little player in town," he said. "We were in the middle of a furniture war, and they had all the nuclear bombs."
Linder's worked to cut it expenses to match weakening sales as the housing market collapsed and unemployment rose, but it couldn't move fast enough, he said. At the same time, its bank was putting on pressure, saying Linder had to put in more of his own moneys in order for the company to continue lending. Also credit card companies began requiring a huge cash reserve to cover possible losses, hurting Linder's cash flow.
"It's like you're caught in a vice between banks and credit card companies," Linder said. "You're just being squeezed."
"Despite our best efforts, these turbulent times have left us with no choice but to wind down our operations," Foucrier, said. "We believe this decision is in the best interest of our customers, employees and creditors."
There's no doubt it was a difficult decision for the Top 100 company founded 31 years ago. Linder said there are many employees who have worked for Linder's for 25 years or longer. "It's scary for them and it's hurtful," he said.
The retailer also had great support from most suppliers, who, among other things, extended terms when times got tough, he said.
"We very much appreciate the loyalty our customers have shown us over the years," Linder said, adding that he hopes those who got hurt will be able to recover and that he can do business with them again in another form.
Foucrier said he's helping employees through the transition as the liquidation begin and will look "to maximize the sale for unsecured creditors." After that, he said he's planning to remain in the industry and will look at opportunities on both the retail and supply sides.
Linder's was No. 81 on Furniture/Today's Top 100 with estimated 2010 furniture, bedding and accessories sales of $60.1 million at its 11 Southern California stores, but Linder said Tuesday its total sales were much less that that, at about $39 million.
Among its key vendors noted earlier this year were Legacy Classic, Fine Furniture Design, Sealy, Universal and Wynwood.
Merinos Home Furnishings opening display room, Boyles addition
‘Mega vessels' likely to boost capacity, stabilize freight rates
HOM Furniture adds flooring to six Twin Cities stores
Dan Masters joins Furniture Brands as VP, business development
21 companies from Turkey, Taiwan and China to exhibit at Showtime
VIEW ALL GALLERIES
