Richmond-based RoomStore closing 4 stores
Clint Engel -- Furniture Today, November 7, 2011
RICHMOND, Va. - Richmond-based The RoomStore is in the process of closing two full-line stores, two clearance centers and a distribution center, which it says is part of continuing efforts to cut expenses in a weak sales environment.
Curtis Kimbrell, president and CEO of the Top 100 company, said the moves will lead to the elimination of about 150 positions. This is on top of roughly 300 people who have been let go through attrition, closings and other moves over the past 15 months.
RoomStore is liquidating a 50,000-square-foot store in Houston and an approximately 30,000-square-foot showroom in Baltimore. It has hired Hilco Merchant Resources to run the two sales.
The retailer also is closing clearance centers in Norfolk, Va., and Fayetteville, N.C. All four store closing sales are under way and should be completed by the end of the year, Kimbrell said.
In Houston, where the retailer will continue operating five stores, RoomStore also will close its 300,000-square foot distribution center by the end of this month, servicing the market from its 370,000-square-foot Dallas center instead.
The company also just exited the Birmingham, Ala., market, where it had operated a store and warehouse with leases expiring.
Kimbrell said the latest closings are similar in that leases were expiring. In some cases, the stores performed well but the renewal terms were too expensive, he said. All the moves aim to "bring our expenses down, and since we're not growing the company now, we're shrinking it down," he added.
He noted that the company already has said it is considering disposing of certain assets. When asked about RoomStore's 83-store Mattress Discounters chain, Kimbrell confirmed that the bedding specialist has seen a lot of interest.
RoomStore owns 65% of the bedding chain. The remaining stake is held by Ray Bojanowski, who had been a Mattress Discounters executive under previous ownership and now runs the chain for RoomStore.
RoomStore's has estimated that it will report a net loss of $3.4 million on net sales of $70.6 million for the second quarter ended Aug. 31. That compares with a loss of $65,000 on sales of $91.9 million for the same period a year ago.
When the recent closings are complete, RoomStore will have about 60 stores, Kimbrell said.
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